There has been a major rise in active office requirements in the South East of England with more than 2 million square feet under offer, in negotiations or at the inspection stage and a host of big names closing in on moves.
Savills reports there are 23 live requirements of more than 20,000 square feet in the market totalling 2.19 million square feet and it says there has been a recent return of demand from corporates with larger requirements.
CoStar News can reveal a number of the requirements in the market.
The Wood Group, the global consulting and engineering group advised by Cushman & Wakefield, is getting closer to a more than 120,000-square-foot headquarters move, with market sources suggesting it is focused on 400 Longwater Avenue at Mapletree's Green Park in Reading. It is based at Export House in Woking and Compass Point in Staines.
Separately AbbVie, the US pharmaceutical group advised by CBRE, is on the hunt for a 70,000-square-foot office and looking across the M4 corridor at Reading, Maidenhead and Marlow. It is based at AbbVie House at Vanwall Business Park in Maidenhead.
US gas and chemical sales group Air Products, advised by Realest, is looking for around 70,000 square feet across markets around the south western M25. It is based at Hersham Place Technology Park in Hersham, Surrey.
Manufacturing giant Stanley Black & Decker, advised by Colliers, is looking for up to 30,000 square feet in Slough or Maidenhead, with two buildings including Kennedy Wilson's Botanica in Ditton Park thought to have been shortlisted.
Epson, advised by Savills, is looking for around 40,000 square feet in the Watford area. It is based at Westside in Hemel Hempstead. German insurer Allianz, advised by JLL, is also scouring the South East for around 40,000 square feet.
US multinational food and drinks group PepsiCo, advised by Colliers, is seeking around 40,000 square feet in the Reading area, as it scales back from the headquarters it occupies at Green Park in Reading, and 3M, advised by Colliers, is looking for an office between Bracknell and Reading to house up to 40,000 square feet as it looks to relocate from its long-term headquarters the 3M Centre on Cain Road in Bracknell.
USand Australian engineering company Worley, advised by Savills, is understood to be looking for around 30,000 square feet in the short term and potentially double that in the longer term in west London and the South East. It is based at 27 Great West Road in Brentford.
Digital technology group DXC Technology, advised by CBRE, is looking for around 40,000 square feet across the M3 corridor, while international energy services firm Petrofac, advised by Knight Frank, is reportedly looking for around 30,000 square feet close to its current offices at Dukes Court in Woking.
US computer software group Adobe, again advised by Colliers, is looking for 20,000 square feet of offices in the Thames Valley. Adobe is based at 34-38 Market Street in Maidenhead.
Finally, Microsoft, advised by Cushman & Wakefield, is understood to be seeking 60,000 square feet of tenant release space in the Reading area. It is based at Thames Valley Park in Reading.
Last month CoStar News revealed that rapidly growing Swiss biopharmaceuticals group Lonza is closing in on a deal to buy the former British Gas site at Thames Valley Park to develop a circa 500,000-square-foot offices, laboratory and industrial development.
The group, advised by Cushman & Wakefield, launched a feasibility study for an office, laboratory and factory relocation early last year. It is based in a 210,000-square-foot multi-product manufacturing and development facility at 228 Bath Road in Slough and uses the site to produce ingredients for start-up biotech and large pharmaceutical companies. It has 1,300 employees working at the site.
The welcome improvement in office demand follows a very quiet beginning to 2023.
Savills reports that the Truss mini Budget of September of last year continued to have an effect in the first quarter of 2023, with a subdued take-up of 467,000 square feet which mirrored the first quarter of 2022, but is 39% behind the five-year average. It says the lack of economic certainty has resulted in many occupiers putting requirements on hold or delaying decisions until there is more confidence in the market.
Trends from occupiers over the last 12 to 24 months have been to reduce footprints and commit to prime space.
But Savills points out that in recent months, there have been a number of notable changes in policy and sentiment from CEOs at major global companies, publicly stating the importance of the office with increased mandatory working in the office. That might be a factor behind the recent increase in live requirements.
Andrew Wilcock, head of Greater London and out East at Savills, said: "The last 18 months for take up has been challenging. But now there is some really good demand and transactions going under offer and I think we will see more deals now at the back end of the year."