NEW research from a national commercial property consultancy suggests that the next decade will see a trend of office occupiers moving away from London to the major cities outside of the capital.

In the south Reading is proving more popular than Southampton for companies quitting the capital, according to Lambert Smith Hampton’s annual office market report.

The report names the Thames Valley city along with Bristol, Manchester and Birmingham, Cardiff and Glasgow as the fastest growing office markets.

Reading accounted for a quarter of the firm’s southern region take-up in 2015 with 559,000 sq ft of space rented. Among the major firms relocating to Berkshire were Thales and Bayer.

The south coast had an outstanding year in 2015, says the report where take-up was 31 per cent above its 10-ten year average but 2016 began quietly.

The area is caught in a Catch-22 position – there’s a shortage of offices but until rents rise builders will not be tempted to start new schemes.

The only speculative development currently under way on the South Coast is a single scheme of 30,600 sq ft at Southampton Science Park, due for completion in the autumn. This compared to Reading where there is a 190,000 sq ft speculative development.

 Andy Hodgkinson, director of office agency for Lambert Smith Hampton’s South Ccoast team, comments: “The diminishing availability of office space, in particular Grade A space, along the South Coast is driving rents up, but it is worth noting that these are still only back to levels that were being achieved 25 years ago!

“The region is in dire need of new offices to meet the changing demands of today’s occupier market and to deliver this, rents will have to rise further. There will be a recalibration in the market and prime rents for new build offices in the best locations will inevitably have to set a new benchmark for the region.

“Given that the fall in available supply looks set to continue and demand is being maintained, the scenario where this becomes reality is getting closer, following a trend that is already evident in other regional office centres in the UK.”

Tony Fisher, national head of office agency at Lambert Smith Hampton, said: “The significant cost advantages offered by the UK’s core regional cities are such that we are starting to see a rebalancing of business activity away from London over the coming decade.

“As the differential in occupational, staff and housing costs continues to widen, both bosses and staff are beginning to recognise that there is life outside of the M25.

“Far from being a threat to London’s primacy, this represents an opportunity to vent some of the pressure which is building within the capital.

"This could be a win-win for everyone."

He said new schemes in the core regional cities should be considered to suit the needs of both existing businesses as well as be targeted at progressive occupiers in the capital who may benefit from relocation.