City Office:
Market Watch

City Office Market Watch
City Office Market Watch

27 February 2018, words by Ben Raywood

Two big pre-lets help keep the strong levels of demand continue into 2018

Supply and demand snapshot

■ The above average levels of demand seen in 2017 have carried over into 2018 with take-up for January being 434,273 sq ft, which is 58% up on last year and 24% up on the 10-year average for the first month of the year.

■ The 12-month rolling take-up reached 7.5m sq ft, which is the highest since September 2015 (Graph 1).



Key January stats

Table 1

Source: Savills Research


City 12-month rolling take-up

Graph 1

Source: Savills Research 

■ We are expecting there to be an increase in the amount of sub-let space to the market this year. Eight out of the 28 transactions in January were either a sub-let or assignment and equated to 16% of total take-up.

■ A notable transaction to complete in January saw SMBC Nikko pre-let levels three to five (161,156 sq ft) at 100 Liverpool Street, EC2. The financial investment firm have pre-let the space with the British Land/GIC scheme scheduled to complete at the end of 2019.

■ Also in January, Mimecast pre-let 78,629 sq ft across levels three and four of 1 Finsbury Avenue, EC2. The technology firm is expected to move into the British Land/GIC scheme at the start of next year, where circa 150,000 sq ft remains available.

■ As a result of the two large pre-lets, the Insurance & Financial services sector has accounted for the greatest amount of take-up so far this year at 40%, followed by the Tech & Media sector at 26%. The Professional services sector is next accounting for 9%.

■ Total City supply stands at 7.0m sq ft at the end of January, equating to a vacancy rate of 5.6%, which is the same as this point last year and down on the 10-year average by 110 bps.

■ Strong demand has carried through into 2018 with a total of 478,644 sq ft going under-offer in January. This brings the total volume of space under-offer to 1.4m sq ft, 10% up on the long-term average (Graph 2).


City under-offer amounts

Graph 2

Source: Savills Research

■ Following the increase in serviced office take-up, who largely target smaller occupiers, we have seen an increase in the number of small floorplates available. There are an additional 93 units, up from a total of 622, available now of less than 10,000 sq ft in the City compared to January 2017.

Analysis close up


Monthly take-up

Table 2


Year-to-date take-up

Table 3



Table 4



Table 5


Development pipeline

Table 6


Demand & under offers

Table 7

Demand figures include central London requirements

Completions due in the next six months are included in the supply figures

*Average prime rents for preceding three months

** Average rent free on leases of 10 years with no breaks for preceding three months

N.B We have amended our historic stock figure, resulting in a slight change of our historic vacancy rates (Aug 2015)


Significant January transactions

Table 8


Significant supply

Table 9


Savills City Office Market Area (updated at the end of each quarter)

City 2017 Q4 stats

Map 1

Source: Savills Research


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Key contacts

Ben Raywood

Ben Raywood

Commercial Research

Margaret Street

+44 (0) 20 7409 8791


Peter Thursfield

Peter Thursfield

Central London

Finsbury Circus House

+44 (0) 20 7409 8928


Josh Lamb

Josh Lamb

Central London

Finsbury Circus House

+ 44 (0) 20 7409 8891