Q4 2020 Central
The investment market ended the year with a flurry, but the leasing market ended the year at a low point - will this divergence continue?
The final quarter ended the year with a flurry of sizeable investment transactions completing, particularly of assets located in the West End. Investment volumes reached £4.9 billion during the quarter this was 34% above the 10-year quarterly average of £3.7 billion. This was more than had traded in the previous three consecutive quarters and brought the year end volumes to a respectable £9.2 billion, although still down by 27% on 2019 activity and well below the 10-year average of £15.0 billion. There is a further £2.4 billion of assets under offer and £4.0 billion available, which should see the momentum seen in the final quarter carry on into 2021.
The leasing market ended the year at a low point, as tighter restrictions came into force across London. Leasing activity saw consecutive quarterly falls during the pandemic, with just 751,000 sq ft let during the final quarter. This was the lowest quarterly volume on record and brought the full year total to 4.7 million sq ft - also the lowest annual level recorded. Volumes were 60% down in comparison to last year and were also 54% below the 10-year average of 9.9 million sq ft.
Our issue to watch this quarter also looks at our predictions for the economic recovery and the three themes we see for the year ahead.
Read more about London's office market in our Q4 2020 report.