Research

Q1 2024 Central London Office Market Report

Report on leasing and investment activity for the central London office market in Q1 2024

April 30, 2024
Contributors:
  • Chris Valentine
  • Julian Sandbach
  • Elaine Rossall
  • Hayley Mooney

This comprehensive report offers critical insights into the Central London commercial real estate market in Q1 2024, analysing key data points across occupier take-up, demand, supply, rentals, and investment dynamics.

The quarter experienced subdued leasing activity with only 1.5 million sq ft transacted, marking the lowest quarterly volumes since Q1 2021, and was 31% below the 10-year Q1 average of 2.2 million sq ft. Pre-letting activity also saw a decrease, with only 244,000 sq ft pre-leased, accounting for 17% of quarterly take-up.

Who leads leasing activity in Q1?

The banking and finance sector dominated Q1 activity related to occupier take-up, accounting for 28% of the quarterly volumes, largely due to transactions from Wise Payments and Investec at Worship Square, EC2 and 30 Gresham Street respectively. The total space under offer impressively rose 54% over the quarter to 3.7 million sq ft with 71% of this for pre-let, newly built, or refurbished stock.

Occupier demand remained resilient with a notable 12.3 million sq ft of active requirements circulating the Central London market - this was 33% ahead of the long-term average.

Supply

Central London supply fell for the second consecutive quarter to 22.0 million sq ft as a result of units being removed for conversion to alternative uses in the East London market. Vacancy rates were at 9.0%, with new build supply standing at 3.8 million sq ft and refurbished supply at 4.8 million sq ft at quarter-end.

Rental rates

Rates across Central London remained stable throughout Q1. The prime West End rent sat at £140.00 per sq ft, reflecting a 7.7% annual increase, while in the City, prime rents stayed at £79.50 per sq ft, marking a year-on-year growth of 6.0%.

Investment

Investment volumes in Central London totalled £1.2 billion in Q1, being 46% below numbers recorded in the corresponding period in 2023 and 60% below the 10-year Q1 average of 2.9 billion. UK investors led the charge this quarter, contributing 56% to the total investment volumes.

You can download the full Central London Office Market Report for Q1 2024 here.

Download the full Central London Office Market Report for Q1 2024 here

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