Demand for small to medium, and Grade A offices, is creating new opportunities for new contracts despite the economic slowdown and growth in working from home.

Work is set to start on a significant number of small and medium-sized office construction projects around the country this year, particularly schemes involving highly specified space, which will provide opportunities for new contracts.

Glenigan data provides numerous examples of new office building projects worth up to £100 million where work is getting underway in coming months, often involving the creation of new Grade A offices and energy efficient buildings.

One key driver of activity in the sector is the need for employers to create space which encourages employees to actually attend the office. A typical working week in the office for many staff is now Tuesday to Thursday – with occupancy on a Friday as low as 15% – whilst empty office space in London is reported to have doubled over the past three years.

Need for attractive office environments

Yet a recent survey by property agent Carter Jonas found that despite uncertainty over office occupation levels, prime rents for office space remained resilient and have climbed above pre-pandemic levels in many city centres. It highlighted the need for employers to create an attractive environment to support staff recruitment, retention, and productivity strategies.

Meanwhile, more office refurbishment projects are also in the pipeline as employers adapt space to suit changing working conditions and meet higher energy efficiency standards.

The upshot is a positive outlook for contractors on smaller office developments. After a 4% increase in new office starts in 2022, the latest Glenigan Construction Industry Forecast 2023-2024 predicts a further 5% increase in 2023.

The pipeline looks notably healthy in London, the East of England, Yorkshire & Humberside and Northern Ireland. All these regions saw an increase in the value of underlying office project approvals (under £100 million) in 2022, compared to the previous year.

New office building activity on business parks is one promising market. At Abingdon in Oxfordshire, tenders have been returned and work is set to start in the spring on a £30 million office project at Milton Park for MEPC (UK). The scheme involves the extension and refurbishment of two existing buildings and a new single storey pavilion building across almost 6,500 sq m of floor space (Project ID 14134407).

Tech sector office opportunities

Offices for the tech sector also offer new work opportunities. At Melbourn Science Park at Royston near Cambridge, a £46.2 million scheme involving seven offices, a lab and hotel for Bruntwood SciTech is at the pre-planning and pre-tender stage. Work on the scheme of almost 55,000 sq m is set to start in summer 2023 and run for 24 months. (Project ID 21089199).

Meanwhile at MIRA Technology Park in Nuneaton in Warwickshire, tenders are being invited for a £24.4 million offices and workshop scheme for Horiba Mira Ltd. Work on the scheme covering over 10,500 sq m is due to start in the spring and run for 17 months (Project ID 22353989).

Smaller office facilities for regional firms also offer opportunities for new construction contracts. At Aven Industrial Park in Rotherham in Yorkshire for example, AC aggregates has recently secured detailed planning permission for a new £600,000 office scheme with associated infrastructure where work is set to start in the spring and run for nine months (Project ID 22412443).