The UK office market is poised for the strongest rental growth in a generation, according to fresh five-year forecasts from BNP Paribas Real Estate.
Prime office rents in certain locations could rise by up to 31 per cent by 2029, underpinned by a tightening supply pipeline, solid demand from key occupier sectors and a widespread shift towards high-quality space.
After a phase of market “pricing realignment,” investors now have a rare opportunity to secure attractive returns, says BNP Paribas Real Estate. A confluence of factors is pushing prime rentals upwards: supply chain constraints on new-build offices, a marked “flight to quality” by occupiers focusing on environmental, social and governance (ESG) considerations, and robust demand from sectors such as finance, tech, and professional services.
Etienne Prongue, UK CEO at BNP Paribas Real Estate, believes these structural changes are reshaping investment strategies: “With economic fundamentals reshaping global real estate markets, the UK is emerging as one of the most compelling investment destinations. A structural shift towards income growth is well underway, and investors who recognise this stand to benefit from rental uplifts that will significantly outpace inflation.”
BNP Paribas’s forecasts spotlight continued outperformance in London. The West End and the City of London are both projected to exceed 25 per cent prime rental growth by 2029. Strong interest from banks, private equity, hedge funds, tech giants and other high-value industries is driving the competition for top-tier, sustainably built office properties.
Fergus Keane, Head of London Capital Markets, says: “London remains one of the most supply-constrained office markets in the world. Occupiers see prime office space as essential for their success, and with a limited pipeline, rents are expected to climb steadily.”
Outside the capital, regional markets such as Birmingham, Bristol, and Leeds are set for similarly substantial increases, supported by economic diversification and ongoing relocations from the South East.
Birmingham and Leeds are each tipped to see rental growth of around 28 per cent, driven by vibrant financial and tech communities. In Bristol, a strong creative and professional services scene is expected to spark a 25 per cent uplift over the same period.
Simon Williams, Head of National Markets at BNP Paribas Real Estate, comments: “These locations are seeing an influx of investment, infrastructure projects, and corporate moves, so we anticipate rental growth in these cities to outstrip the norms of previous cycles.”
Crucially, ESG considerations and employee demands for premium, flexible work environments are driving the move towards Grade A offices. This is likely to sustain ongoing rental uplift in the best-equipped, most efficient buildings. Meanwhile, landlords with older or lower-grade properties face growing pressure to refurbish, retrofit or otherwise adapt to remain competitive.
With this outlook, BNP Paribas Real Estate says the UK’s prime office sector will become increasingly attractive to a broad range of investors, particularly those looking for stable, income-driven returns that could outperform inflation. As economic fundamentals and worker expectations evolve, many see the UK’s prime office market as a powerful pivot point for growth.
