New data from Savills shows that take-up of office space across central London reached 5.1 million sq ft by the end of Q3 2021, easily overtaking 2020’s total annual take-up of 4.7 million sq ft, with the final quarter of the year still left to go.
2.4 million sq ft of space was let in Q3 alone, says the international real estate advisor, showing the continued gain in market momentum since lockdown restrictions were lifted.
While year to date take-up is still down 54% on the pre-Covid long-term average take-up, underlying demand for space has also increased, with over 3 million sq ft of office space under offer at the start of Q4, according to Savills. In total, active office requirements in the central London market currently stand at 9.9 million sq ft, up 26% on the five-year average.
54% of potential occupiers are prepared to look anywhere across central London rather than in a specific sub-market, reflecting that occupiers are prioritising finding a building that meets all their preferences over a particular location, says Savills.
Philip Pearce, head of central London agency at Savills, comments: “Since the second quarter of this year we’ve seen confidence return to the market as occupiers put in place their return to work strategies, with most calculating that even with some hybrid working they still need the same overall quantum of office space. What they’re demanding though is that this space is the best quality it can possibly be, hence they’re casting a wide net to consider Grade A space across all central London locations, rather than demonstrating a inclination towards to a specific area.”
Large transactions to complete in Q3 include Facebook taking 312,000 sq ft of office space at 1 Triton Square (312,000 sq ft), law firm Travers Smith acquisition of 158,000 sq ft across the 5-13th floors at Stonecutter Court, EC4, and the Office Group’s 138,000 sq ft pre-let of the R8 development in King’s Cross.