Demand from businesses to lease office space reached its highest point since the pandemic in the first quarter of 2025, according to Rightmove’s latest commercial data.
The Quarterly Commercial Insights Tracker revealed that demand for office space is 19% higher than in the same period last year, and comes at a time when many businesses are continuing to consider how often employees should be in an office together.
Research panel finds office commute is a top priority
A snap poll in Rightmove’s research panel, Living Room, also shed some light on what could attract UK employees to spend more time in an office.
Among more than 350 office workers, a shorter commute (51%), free or discounted food (39%), greater flexibility with working hours (34%) and better facilities (29%) were some of the top priorities employees said would make them want to go to the office more.
The things that people found most frustrating about working in an office were the commute (61%), the office temperature (27%) and poor office facilities (24%).
Industry experts suggest a desire from employees to work in top class office spaces near good transport routes, particularly the Elizabeth Line in London, is driving business decision making.
“Modern, well-positioned office space with great amenities and service is being used as an added incentive to attract top talent, to encourage them into city centres more, and is seeing strong demand,” said Andy Miles, Rightmove’s Managing Director of Commercial Real Estate. “Older, energy-inefficient and less comfortable office spaces are struggling to meet expectations from office workers.”
Stephen Page, Partner at Anton Page in London, agreed. “Post-pandemic, modern offices have become lifestyle spaces rather than just somewhere that people spend the hours between nine to five,” he said.
“Businesses want to be near good transport links, particularly key Elizabeth Line stations, and in a building that has the kind of amenities that excite top talent. The higher-end of the market, the best-in-class office buildings, are doing well and seeing strong demand.” In addition, Page said that businesses are now far less likely to want to get involved in fitting out their premises. “There is greater demand from medium-sized businesses for offices that are fully furnished and ready-to-go, rather than needing the time and upfront costs for businesses to fit out themselves,” he said. “Landlord’s have responded to this by offering turnkey solutions.”
Overall demand to invest has increased by 19%
In other trends, demand to invest in commercial property of all types continues to grow as the interest rate environment becomes more favourable. Demand to invest in commercial property is now 19% ahead of Q1 2024.
This quarter, demand to invest in offices outpaced the industrial sector, which had been leading the way. Demand to invest in the office sector is up by 75% versus the same period last year, albeit from a low base, compared with 70% for industrial.
Continued demand for warehouses
In the leasing market, demand for leisure and hospitality spaces is up by 37% versus the same period last year. Demand for industrial space is also up 37% as the growth of e-commerce continues to fuel demand for warehouses.
“The UK industrial and logistics sector remained active in Q1 2025,” said Claire Williams, Head of UK & European Industrial Research at Knight Frank. “Preliminary data points to 8.1 million sq ft of occupier take-up – a decrease on the previous quarter, although this comparison is skewed due to a recent upward revision of Q4 2024 figures. Vacancy rates remain stable quarter on quarter and are expected to decline as the year progresses.”
Williams added that the outlook for the rest of the year is positive. “Although the occupier market [in Q1] lacked the presence of ‘mega’ deals, the pipeline remains promising, with several sizeable assets under offer and expected to complete in Q2,” she said. “Moreover, there are multiple significant requirements currently active in the market, indicating strong latent demand.”
About the Commercial Insights Tracker
Rightmove’s Quarterly Commercial Insights Tracker analyses millions of data points from the largest and most engaged commercial audience in the UK, to track supply and demand over time. Demand is measured by enquiries to commercial agents about listings to lease or to invest in via Rightmove.