Research

Central London office market report Q4 2018

The last three months of 2018 were a political roller coaster ride as Brexit was all encompassing. Despite this, a strong outturn to the year was evident for the central London office market. 

The leasing market ended the year strongly, with over 3.1 million sq ft let in the final quarter. This was virtually on a par with Q3 and brings the total for the year to 11.5 million sq ft.

Pre-leasing was a key contributor to activity in the final three months of 2018, with over 1.0 million sq ft of space taken before completion. This brought the annual total of pre-lets to just under 4.1 million sq ft, or 35% of take-up, which was the highest annual level ever recorded.

Despite the uncertainty in the wider political and economic arena, occupiers’ continued commitment to London was evident. The number of transactions over 50,000 sq ft in Q4 stood at 11, with three transactions over 100,000 sq ft.

Both the West End and City experienced a robust end to the year, with above average levels of leasing activity recorded. In contrast, East London was subdued but nevertheless, on an annual basis, volumes were up on 2017. The City recorded the highest annual levels of leasing since 2014 at 6.7 million sq ft, while the West End saw volumes above 4.0 million sq ft for the second consecutive year.

Overall supply contracted by 15% during the quarter to 9.5 million sq ft, the lowest level since 2016. As a result, the overall vacancy rate dipped to 4.3%, down from 4.6% at the end of Q3.

There was a strong end to the year from an investment perspective, with more than £5.4 billion transacted. This resulted in full year volumes of £17.9 billion, compared to £17.7 billion in 2017.

Read more in the Q4 2018 central London office market report. 

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