Out-of-town business parks account for almost 50% of office leasing activity that has taken place in the South East and Greater London markets over the past 12 months, according to new data from Knight Frank.

Business parks in the region accounted for 1.7m sq ft of leasing activity – 49% of total activity – with seven of the 10 largest leasing transactions over the past 12 months recorded in out-of-town locations.

BAE System’s 155,000 sq ft worth of deals at Reading’s Green Park represented the largest transaction, with other notable deals including ARM’s 95,709 sq ft letting at Peterhouse Technology Park in Cambridge (pictured).

Just 42,960 sq of new out of town office space is currently under construction set against 3m sq of active demand and 7.1 m sq ft of lease events by the end of 2027.

Roddy Abram, head of South East and Greater London offices at Knight Frank, said: “Demand for new and refurbished offices in the region’s top business parks remains robust, evidenced by recent large lettings. Overall, the gap between Grade A and B vacancy availability is the widest in 11 years, with one-third of vacant space no longer aligned to modern occupier expectations. The business parks that prioritise placemaking and community will continue to attract large companies with campus-style requirements.”

Simon Rickards, head of national offices capital markets at Knight Frank, added: “Sustained occupier demand and rental growth at the most reputable and amenity rich business park locations highlights a compelling opportunity for investors, given the ongoing disconnect in prime pricing between town centre and out of town assets. Top-tier, well let assets in central locations remain sought after, with prime pricing stabilised in the 7.00%–7.50% yield range, reflecting their secure, long-term income profiles.

“However, when similarly strong assets are situated out of town, investor perception often shifts – leading to materially softer yields despite comparable occupational fundamentals. This pricing gap presents a notable opportunity for value-driven capital to access high quality, secure assets at a relative discount.”