Remember the pandemic chatter about suburban and out-of-London offices being the new normal? Property investors haven’t forgotten.

New data from Knight Frank showed that investment volumes in England’s south east in the first nine months of 2021 have already outpaced those in both old-normal 2019 and new-normal 2020.

Total year-to-date investment into office assets across the south east region (excluding central London) stands at £2.49B, boosted by a strong summer quarter that saw £524M transacted, the best figure since the pre-pandemic first quarter of 2020. Despite travel restrictions, international buyers have accounted for 69% of investment volumes this year to date.

Cambridge, the university city famous for its life sciences sector, accounted for a generous 22% of the region’s property investment, another sign that investors have been reading and remembering the news.

Capital markets activity reflects the occupational scene where TMT occupiers drove demand by accounting for 33% of floorspace let. TMT deals are also getting larger, averaging 22K SF.

Total office take-up in the first nine months of 2021 reached 1.95M SF, up 27% on the same period in disappointing 2020. Vacancy levels remain low at 6.6% and are unlikely to reach the 10-year average of 7%.

Yesterday’s H1 data from Investec Real Estate confirmed the investor bias to the south east. The lender said its private client lending team has provided over £225M since 1 April 2021, taking the total committed loan facilities past £1B.

Investec’s private client team has lent against a variety of both commercial and residential real estate schemes, primarily in London and the south east. This included a UK medical portfolio comprising 35 assets for a consortium of South African clients.

“The fact that this profile of office space is limited in supply, due to the development pipeline being squeezed over the past 18 months, means that investors are competing for assets in an undersupplied market where future demand will continue to increase asset values in the higher end of the market,” Knight Frank Head of South East Capital Markets Simon Rickards said.