They argue that in ‘real’ terms rents are considerably cheaper than in 2000, and that employment costs and winning the ‘war for talent,’ remain by far the biggest concerns for occupiers.

For much of the current development cycle Strutt & Parker points out that the success of new office developments in key south east towns has been benchmarked by rents achieving pre-recession headlines, set in 2007. They suggest that in the last 12 months there has been a shift away from this with nearly all south east locations surpassing the peaks from the previous cycle – by up to 15% in some areas.

Strutt & Parker highlights that the majority of commercial hubs within the south east, with the exception of Slough, Crawley, Bracknell and Basingstoke, have exceeded previous record rents with Maidenhead achieving the highest rent of £37.50 per sq ft, up from £32.50 per sq ft in 2007. The greatest successes of this cycle have been attributed to the delivery of new Grade A space, on which all of the new record rents have been set.

This activity follows a sustained period of rents falling in real terms, according to Strutt & Parker. They cite that when benchmarked against the Consumer Price Index from 2000-2016 rents across the region have fallen between 12% and 41%.

Ed Smith, head of national markets office agency at Strutt & Parker said: “82% of transactions in the south east in the last two years have been on Grade A or New Grade A space, demonstrating a flight to quality by occupiers. This demand for high quality, well-located space remains unabated, with identified named demand currently standing at 4.75m sq ft.

“We fully expect to see rents move on further and new highs to be reached; occupiers fully accept that a premium rent needs to be paid to secure the best connected buildings with amenities on their doorstep. The only factor that may hold this progression back is supply levels in some locations. 1.5m sq ft of new space is set to be delivered this year and we anticipate that some of the new record rents will be surpassed and £40.00 per sq ft could be achieved in the south east. In towns with limited supply, occupiers will have to consider off plan pre-letting which was witnessed in Staines, Wimbledon, Abingdon and Crawley in 2015. Alternatively a move to a location with Grade A New supply could be the solution - Reading has certainly benefitted from its healthy supply levels this year with Thales and Bayer moving from Basingstoke and Newbury.”

Tom Grounds, partner in research at Strutt & Parker, added: “The strong levels of rental growth being experienced in some south east locations are not set to run into any sort of affordability ceiling. The reality is that rents are considerably cheaper in real terms than they were at turn of the century. For occupiers, staff costs are a far larger part of the cost pie, and winning the ‘war for talent’ is dependent upon having good quality accommodation in the right location. In towns where rents aren’t moving on as quickly this is due to stronger supply pipelines and/or weaker amenities and connectivity - not occupiers’ concerns over cost.”