Research article

Build: Perspective – Regional Offices

What occupier capital expenditure priorities mean for office delivery?


With employees spending on average 3.6 days a week in the office, the workplace becomes increasingly important in creating value. It should help build culture and relationships, support collaboration and teamwork, and create conditions for innovation. The latest Savills and Core Net Global ‘Measuring the Value of the Evolving Workplace Survey’ reinforces these expectations, with 99% of business leaders saying that the office can add value across these three areas.

However, only 38% are highly confident that they could measure the impact. For executive leadership teams, they must decide where capital expenditure needs to be allocated to strengthen the workplace experience, while landlords and developers need to ensure that the space, infrastructure and flexibility to deliver amenities are considered from the outset.

This presents an opportunity for landlords and developers to create an appealing culture within the building itself in order to retain and attract new tenants.

With construction costs continuing to rise and occupier demand remaining firmly focused on the best-quality assets, landlords, developers and occupiers will need to be increasingly selective about which measures to allocate their capital expenditure towards.

Nick Taylor, Director, Lease Consultancy

The challenge they face is that not all enhancements carry the same capital burden. Amenities such as breakout areas, bookable meeting rooms and town hall and theatre-style spaces require additional audio-visual technology and ventilation along with the physical space itself. Health and wellbeing facilities, including yoga studios and gyms, may also require power, drainage systems and other building services and take up what would otherwise be income-producing NIA. In comparison, branding and interior design and the latest generation of access controls can help to create a distinct identity at a more modest capital cost. Visible energy monitoring, recycling infrastructure and other occupier-facing ESG measures can be introduced through finishes, joinery or refurbishment. Operational initiatives such as hotel-style concierge, community apps, book clubs, run clubs and local business discounts sit outside the construction budget and can create a unique culture for the building.

This distinction is becoming more important as market conditions have reflected a shift towards premium space. Take-up across the Big Six reached 1.63 million sq ft in H1 2026, 4% below the H1 five-year average. However, Grade A and prime space accounted for 61% of activity, sitting 14% ahead of the five-year average. Prime vacancy stands at 1.9% against 10.7% for the wider market, while headline rents have reached £52 per sq ft in Birmingham and Bristol. This, combined with the fact that our Build: Perspective index points towards an increase in the cost of occupier fit-out and refurbishment across regional offices, places additional pressure on projects. With construction costs continuing to rise and occupier demand remaining firmly focused on the best-quality assets, landlords, developers and occupiers will need to be increasingly selective about which measures to allocate their capital expenditure towards.

The prize is that if landlords and developers can provide communal facilities and a unique culture within a building, while still maintaining viability, they can attract tenants who recognise the value in collaboration and culture and are willing to offset higher rents with reduced capital expenditure.


 

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