Four UK cities could run out of premium office space within months, according to a new report from property giant Cushman & Wakefield that lays bare the scale of the supply crunch facing regional markets.
The firm’s latest National Office Moves report reveals that Birmingham, Edinburgh, Leeds and Manchester each began 2026 with less than one year’s supply of Grade A space available. With demand continuing at current levels, that stock could be fully absorbed inside the next 12 months, the report warns.
Why premium space is in such high demand
The shortage is being driven by a structural shift in what businesses want from their offices – a phenomenon analysts call the “flight to quality”. Across the UK, occupiers are overwhelmingly consolidating into high-quality, amenity-led buildings, even when they are reducing their overall footprint. Of the 228 office deals by existing occupiers analysed in the report, 181 transactions – 123 expansions and 58 contractions – involved Grade A space, underscoring the clear preference for premium environments.
This trend has been supercharged by the maturation of hybrid working. Companies have established predictable occupancy patterns, and while some have rightsized their space, expectations around workplace quality, sustainability and employee experience have risen sharply. Environmental, Social and Governance (ESG) compliance is now a significant factor in leasing decisions, with well-specified, ESG-compliant buildings in high demand. Flexible and serviced office spaces are also seeing strong demand, as tenants seek agility, hybrid-ready environments and cost certainty.
At the same time, the pipeline of new developments is severely constrained. Across the UK, only about 1.3 years of Grade A supply is currently under construction, and construction starts are expected to remain below trend in 2026 because of planning hurdles, elevated building costs and high development finance costs. In Manchester, no new-build office space is scheduled for delivery until 2027, forcing the market to rely on high-quality refurbishments to plug the gap. Similar constraints are evident in Leeds, where only one new-build scheme is on site and three more are awaiting pre-lets.
The scarcity is already pushing rents upward. Birmingham’s prime rents reached £46 per sq ft in 2025 and are forecast to hit £47-£48 per sq ft by the end of 2026. Leeds saw prime rents jump 18% to £46 per sq ft in 2025. Manchester achieved a new headline rent of £45 per sq ft at the St Michael’s development, with forecasts suggesting it could surpass £50 per sq ft by the end of 2026. Edinburgh’s prime rents are predicted to reach at least £60 per sq ft by 2030, while Bristol remains the highest-rented of the “Big Nine” regional markets at £50 per sq ft.
Business expansion gathers pace
Despite the supply constraints, the data shows a clear expansionary trend across all regions and office size bands in 2025 – a marked change from previous years when some areas reported downsizing. Of the 228 office deals by existing occupiers, 156 saw footprint growth, meaning more than twice as many movers expanded rather than reduced their space. The result was a net expansion of 668,900 sq ft across the markets measured.
Large-scale occupiers drove the trend: all activity over 100,000 sq ft involved tenants taking more space. The biggest single regional office deal of 2025 was BAE Systems expanding its presence by 155,500 sq ft across two buildings at Green Park, Reading, under the Global Combat Air Programme. In Manchester, Auto Trader took 130,000 sq ft at 3 Circle Square, relocating its headquarters and growing its footprint in the city. In Bristol, law firm Burges Salmon renewed its lease at One Glass Wharf, taking the entire 216,172 sq ft building until 2045 – reported as the largest office letting ever completed in the city centre. Other notable deals include EY signing for 94,000 sq ft at Three Chamberlain Square in Birmingham, Hargreaves Lansdown committing to 90,000 sq ft at the Welcome Building in Bristol, and National Rail acquiring 108,576 sq ft at 2 Princes Square in Leeds.
Manchester accounted for 86% of all deals in the “Big Five” markets and delivered a net gain of 308,500 sq ft. Edinburgh, Birmingham and Leeds recorded a more modest but still positive net expansion. The South East, which had seen a significant net contraction in 2024, rebounded to a net gain of 182,900 sq ft in 2025.
Charles Dady, head of national office agency at Cushman & Wakefield, said the supply shortage is likely to force some occupiers who want to move to extend or regear their existing leases while waiting for new stock to be delivered. “Without urgent investment in new, high-quality offices, occupiers will be faced with little choice but to stand still,” he warned.
Sector-specific growth and contraction
The expansionary trend was fuelled by several key sectors. Technology recorded the biggest net expansion, reversing its contraction in 2024 with a net gain of 241,200 sq ft in 2025. Science and innovation also rebounded sharply, moving from the largest net contraction in 2024 to a net expansion of 146,200 sq ft. Other growing sectors included media and healthcare.
On the other side of the ledger, the insurance sector saw the most contraction in 2024, driven by significant downsizing transactions in the South East. Business services, manufacturing and energy also recorded net contractions.
In Edinburgh, the insurance and financial sector was the most active in 2025, leasing 22% of overall take-up. The city’s market transacted just under half a million square feet – below the ten-year average – with many businesses opting for short-term extensions, but a stronger pipeline of requirements is anticipated for 2026. Leeds saw the “public services, education & health” sector account for 32% of total take-up, while in Birmingham professional services was the leading sector at 59% of leased space. In Manchester, the TMT sector saw the biggest increase in footprints, driven by Auto Trader.
Joshua Woolnough, senior research analyst for regional offices at Cushman & Wakefield, said the growing demand for larger, higher-quality office space reflects trends first identified in Central London last year. “Growing confidence in the value a premium workspace provides to businesses and staff is now evident in the regional data too,” he said. He added that occupiers who reduced their space during the Covid pandemic are now expanding again: more than 80% of those whose previous move occurred post-2020 chose to expand when relocating in 2025.
