Our latest review of the central London office market looks at activity in central London during the second quarter of the year.
Central London take-up rose to 3.9 million sq ft for Q3 2018, with five deals over 100,000 sq ft recorded including Facebook’s acquisition of over 600,000 sq ft at King’s Cross, the largest West End leasing deal on record.
Occupiers are increasingly cautious about taking space and larger deals are increasingly in response to lease events or from larger tech occupiers that are more secure in the market’s ups and downs. Smaller office deals have noticeably dropped off due to pressure on suites from the co-working sector.
Resilient demand has caused a fall in supply to a vacancy rate of 6%. Although the pipeline is currently concentrated, there is a distinct lack of completions for 2019 and 2020 suggesting uncertainty is affecting the development market.
The investment market continues to remain resilient with £14 billion of volumes recorded since the start of the year. This continued to be dominated by Asian investors, although we are beginning to see more interest from European investors that have begun buying again in London.