Office building with glazed walls at top and brick on ground floor, green shrubs in foreground

Category: property market

Industry stats indicate that an increasing number of career landlords are deciding to invest in offices. Applications for office space projects have shot up this year by 44%, according to specialist lender Shawbrook.

Particular hubs of activity include the South West of England, which saw a huge 233% increase, and the West Midlands, which saw a 225% boost. 

London office applications increased by 100%, which can be expected from the UK’s commercial capital. Wales also saw a 100% increase. 

The explosive rise of office investment is encouraging for the commercial property market, which had been languishing somewhat in the immediate aftermath of the COVID-19 pandemic.

What’s the current appeal of offices?

Since the end of COVID lockdowns across Britain and the world, office-based businesses have been pulling employees back to the workplace. Many employees that were allowed to work from home no longer have this privilege.

As such, office-based companies need more workspaces for their employees migrating away from their home desktops. 

On top of the existing workforce, real estate company Savills has also anticipated a 6% increase in office-based employment in the UK over the next five years.  

Professional landlords with large portfolios are wisely capitalising on this renewed demand, and diversification appears to be the aim of the game.

Not a universal trend

While there is widespread interest in offices in the UK’s commercial centres, not every region is seeing the same surges in applications. 

In particular, East Anglia has seen a large drop in applications, going down by 60%. The East Midlands distantly follows with a drop of 20%.

East Anglia’s prominent decrease can be explained by the fact that it only has a sparse spread of urban centres that would benefit from offices. Other kinds of property investments, such as standard buy to lets, may be more worthwhile in that region. 

Commentary from industry experts

Daryl Norkett, a director from Shawbrook, has applauded the adaptability of private landlords in the face of a rapidly changing industry: 

With Covid firmly in the rear-view mirror, businesses are adjusting to the new normal, which for many includes a return to office working - as evidenced by a 100% increase in applications for London office projects.

As economic turbulence looks set to be on the cards for the foreseeable future, professional landlords should be looking to take advantage of increasing demand across different asset classes to maximise their yield and protect their business.

Similarly, Savills have noted a 9% increase in regional office take-up compared to the first quarter (Q1) of 2024, with 193 transactions and a total of almost 200,000 square feet of office space taken up in Q1 2025.