It is widely accepted that the UK’s regional office markets are facing a critical shortage of ‘best in class’ office space. However, across the UK’s Big Six regional office markets, the flight to quality continues to reshape occupier demand.
As businesses place greater emphasis on location, sustainability, digital infrastructure, and employee experience, the appetite for high-specification office space is intensifying, yet availability of Grade A space is worryingly tight, and development pipelines remain constrained. Currently, just 400,000 sq ft of space is under construction, which is 57 percent below the long-term average.
With new-build activity limited, landlords are responding with a wave of high-quality refurbishments. Notably, 84 percent (1.4 m sq ft) of office space expected to be delivered across the Big Six over the next three years will come from refurbished stock (29 percent pre-Covid), a clear indication of how the market is adapting to meet evolving occupier expectations.
Refurbished offices in the right locations are no longer viewed as second-tier alternatives. Instead, they are commanding competitive rents and, in some cases, outperforming new developments. In cities like Glasgow and Edinburgh, refurbishment rents have already surpassed those of new-build schemes, reflecting not only the growing appeal of repositioned assets but also the limited availability of true prime new-build space and a restrained development pipeline in these cities. This supply constraint is intensifying competition for high-quality accommodation and further elevating the status of well-executed refurbishments in the eyes of occupiers.
The rental gap between new builds and refurbished offices has narrowed significantly across the Big Six, particularly in markets with lower years of supply. The average gap between prime new build and refurbished rents across the UK currently stands at just £1.50 per sq ft, half the average gap recorded in 2019. This convergence highlights the increasing value occupiers place on well-executed refurbishments that deliver both character and performance.
One of the most compelling examples of this trend is Aurora in Glasgow. This 174,000 sq ft Grade A refurbishment has achieved remarkable leasing success, with 167,000 sq ft let since 2023 across seven separate deals. The building has reached rents of £41.50 per sq ft, an 11 percent increase on the first letting, demonstrating strong occupier appetite and rising rental benchmarks for refurbished stock. Aurora exemplifies how repositioned assets are not only meeting but exceeding market expectations in today’s competitive landscape.
In Leeds, 1 East Parade is another standout example. This 53,000 sq ft Grade A refurbishment saw 6,000 sq ft let in Q1 2025 at £35 per sq ft, representing a 13 percent increase on the previous letting within the building. The performance of 1 East Parade reinforces the strength of demand for high-quality refurbished space in the city and the growing confidence among occupiers in repositioned assets.
In Birmingham, 45 Church Street illustrates the growing momentum behind high-quality refurbishments. This 125,000 sq ft Grade A scheme originally built in 2009 has been engaged in c.40,000 sq ft of lettings over the past 12 months at rents of up to £39 per sq ft, a 21 percent uplift on historic levels within the building. With further transactions anticipated to push rents beyond £40 per sq ft in 2025, 45 Church Street highlights the rising value of repositioned assets and the increasing confidence occupiers are placing in high quality refurbished space.
As competition intensifies for high-quality space, well-executed refurbishments are emerging as frontline solutions. They offer flexibility, faster delivery timelines, and the ability to meet sustainability targets, making them especially attractive to occupiers navigating post-pandemic workplace strategies. Refurbishments in prime city centre locations are drawing strong occupier interest and achieving premium rents, reflecting the enduring importance of accessibility, amenities, and connectivity. Looking ahead, the success of the Big Six office markets will hinge on how effectively landlords can reposition existing assets. In a landscape where quality, ESG, and adaptability are paramount, refurbishment is no longer a fallback, it has become a strategic response to the evolving demands of modern occupiers and a direct answer to a stalled development pipeline.
