Brexit Briefing #2: The Impact on

the Central London Office Market

The Impact on the Central London Office Market
The Impact on the Central London Office Market

20 February 2017, by Mat Oakley

Market stabilising in a post-referendum environment

Summary

■ Despite some recent clarity on what path the UK government hopes to take for our exit from the EU, uncertainty about the likely outcomes of these negotiations is still substantial. This makes it hard to chart an accurate path for the London office market over the next five years.

 

■ While neither our upside or downside scenario is positive for the market, we believe that the risks of London losing large numbers of jobs to other EU cities has been significantly overplayed.

■ Investor demand for London offices has undoubtedly changed since the referendum, but the fact that 2016's turnover was 45% above the 20-year average is a clear indication that investors are taking a balanced view of risk and return.

■ The occupational markets will be negatively affected by uncertainty. However, heightened uncertainty will be felt both in terms of lower take-up and lower levels of development activity. This will create a lower ceiling for vacancy rates than was seen in previous cycles. This in turn will limit the rental falls, even under our worst case scenario.

Articles from 'Brexit Briefing #2: The Impact on the Central London Office Market'

The impact on the central London office market

Uncertainty will be a drag on activity, but London still looks comparatively attractive

 
 

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Key contacts

Mat Oakley

Mat Oakley

Director
Commercial Research

Savills Margaret Street

+44 (0) 20 7409 8781