Offices overview
- 34 per cent increase in project starts year-on-year
- 16 per cent increase in main contract awards from last year
- 45 per cent decrease in detailed planning approvals compared to 2024
The office sector performed strongly during the three months to July, with growth in project starts and main contract awards against both the previous three months and a year ago. Detailed planning approvals also grew against the preceding quarter but were below last year’s levels.
Data centres are a relatively small but fast expanding segment of the office sector. The surge of investment in AI development, alongside rising demand from more established uses of processing capacity is spurring investment in new data centres. This is expected to help drive sector growth over the next two years.
Types of projects started
In line with the overall growth in the sector, most value bands experienced growth in project starts.
- Project starts in the over £100m value band totalled £596m, having slipped back 2 per cent on a year ago
- The £20m to £50m value band jumped 116 per cent year-on-year, totalling £500m
- The £50m to £100m value band grew 93 per cent year-on-year, totalling £271m
Regional
- Strong performance in project starts, with all regions except two up against last year
- Only two regions saw growth in detailed planning approvals
- The West Midlands experienced strong growth in both project starts and planning approvals
London had the highest share (38 per cent) of project starts during the period, despite a 15 per cent decrease. Further decline was prevented by the £250m Panorama St Paul’s fit-out in the City. In contrast, totalling £341m, starts in the East of England grew 61 per cent on a year ago, boosted by the £242m Botanic Place development in Cambridge.
The West Midlands led detailed planning approvals in the office sector, having jumped 122 times year-on-year to total £1.094bn. Activity in the region was mainly driven by the £1.078bn Frasers Campus development in Coventry. In contrast, London declined 67 per cent against 2024 to total £332m.