The local office market is being hit by a perfect storm being caused by shrinking supply, build cost inflation and a lack of churn in the market, according to Curchod & Co’s office market report, which covers activity during the first half of the year.

“As we approach the final quarter of 2024, the office property market in Surrey and North Hampshire faces unprecedented challenges,” said Nick Reeve of Curchod & Co’s Farnham office.

“Businesses in South West Surrey and parts of north Hampshire now find themselves in a market with a scarcity of office space, particularly high-quality and new space, and competition. Smaller offices are, in particular, becoming rare, making long-term planning more crucial than ever for local SMEs and businesses are being forced to reassess their occupational strategies.”

This trend is highlighted elsewhere in the firm’s report, which covers the Surrey and North Hampshire market as a whole, where a shift at the larger end of the market towards pre-let and forward-letting agreements is an emerging trend.

“As rents continue to rise, businesses are having to adapt and strategise accordingly,” said Reeve.

“Increasingly, we are seeing companies committing to long-term leases and looking to secure new, well-located office space in advance. As a result, in smaller markets such as Camberley, Farnham and Alton, there is a noticeable migration of occupiers looking for space in larger centres like Farnborough, Guildford and Basingstoke, where there are more opportunities.

“The local market’s future hinges on balancing supply and demand pressures.”