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Investment News
The Nottingham office market enters 2026 with an interesting story to tell. Office take-up and availability data compiled by FHP during 2025 points to a market where occupier demand is strengthening, average deal sizes are growing, prime rents are breaking through significant barriers — and yet the supply of the space that occupiers actually want remains critically short. This represents a compelling picture for investors looking to capture growth in a market which is significantly supply constrained.
Total occupier take-up across Nottinghamshire reached 315,000 sq ft in 2025. While that represents a 14% reduction on 2024, the underlying occupier picture is considerably more positive.
City centre take-up reached 173,631 sq ft, running 30% ahead of 2023 and 5% above 2024. Businesses are gravitating towards the city centre, and out-of-town take-up fell 28% as occupiers continue to prioritise accessible, well-connected city centre locations over business park alternatives. This is not a temporary trend — it reflects a fundamental shift in how many businesses are rethinking their office environments as connectivity, accessibility and amenity are of increasing importance.
The average letting size also tells an equally positive story. Across Nottinghamshire, the average now stands at 4,200 sq ft, up 20% on 2024. In the city centre specifically, it has risen to 5,262 sq ft — a 28% increase on 2024 and a 65% increase on 2023. Businesses are returning to offices; and occupancy levels are higher than at any point since the pandemic. The average Grade A letting size now exceeds 9,000 sq ft, with notable transactions including KPMG, WWCT and Calyx collectively taking 23,000 sq ft at RPG’s East West building, Shakespeare Martineau and Knights both committing to new space at Waterfront House and See Tickets leasing 19,400 sq ft at The Hockley Pod. These are significant commitments to new modern Grade A spaces that speak to the commitment that occupiers are now looking to make to their office spaces.
Immediately available Grade A space across the entire city centre stands at just 4,000 sq ft — 0.5% of overall supply across Nottinghamshire. Grade A take-up accounted for 38% of all city centre transactions in 2025 despite the near-total absence of readily available stock, with a number of schemes being pre-let before reaching practical completion or refurbished to occupier requirements. There remains a number of occupiers who are still waiting for the ‘right’ space to emerge.
Prime rents are set to exceed £30 per sq ft in 2026, with Grade A refurbishments being brought forwards in excess of this level. Grade B rents, by contrast, are largely static. The gap between the best and the rest is widening, and that rental differential will continue to grow as the volume of occupiers chasing a tiny pool of quality space increases. The viability for well-presented refurbishments is becoming increasingly justifiable, albeit we await office market yield performance to improve to complete the picture.
To capture that rental growth, investors need to understand what is driving occupier decision-making in the current market. The businesses we work with day-to-day are more discerning than they have ever been — and that is good news for investors who are prepared to deliver the right product, because it means genuine quality commands a significant premium which occupiers are willing to pay for, and faces very little competition.
Specification alone is no longer sufficient to define best-in-class. The occupiers driving demand in this market — professional services firms, financial services businesses, technology companies and the like are looking for buildings that function as destinations with on-site café facilities, business lounges, high-quality collaborative spaces, excellent end-of-journey cycling and fitness facilities, and well-considered outdoor amenity being increasingly central to letting decisions. Businesses are making a statement to their employees and clients through their office environment, and they will pay a meaningful rent premium for a building that helps them make the right one.
Location remains paramount. Buildings with strong transport connectivity — particularly proximity to Nottingham Railway Station — and easy access to the city’s restaurants, retail and amenity are generating the strongest interest and achieving the highest rents. Nottingham city centre, with its improving food and leisure offer and excellent connectivity, is well placed to satisfy these requirements, which is one of the reasons we are seeing such a pronounced shift of occupier demand towards the city core.
The supply outlook for 2026 is more promising – we anticipate over 100,000 sq ft of new Grade A refurbishment projects coming to market through the year, and the Canal and River Trust’s redevelopment of the former Land Registry Building — a 40,000 sq ft scheme due for completion in Q4 2026 — is set to establish a new benchmark for office quality in the city. New speculative development viability remains challenging given construction costs and lack of yield support which means refurbishment of existing stock is currently the only likely route through which new Grade A supply will emerge. That dynamic creates opportunity for investors able to identify the right assets and undertake suitable refurbishment programmes to meet occupier demand.
The buildings that will perform best are those that combine good fundamentals with the right location and a realistic opportunity to deliver the good quality amenity and high-specification environments that occupiers are seeking. Nottingham has an undoubted shortage of such assets — which will undoubtedly continue to cause upward pressure on rents in the medium term before the prospect of new build becomes viable.
ENDS
Mark Tomlinson
February 2026