London Office Markets
posted on: 5th May 2020 / category: Uncategorised / posted by: Smart-Pads
Office take up in London was above the long-term average in Q1 2020, and the lack of supply in the market persists with availability 9% below the five-year average.
There were excellent levels of commercial demand in the London office market in Q1 2020, which was reflected in take-up volumes reaching just over 900,000 sq ft. This was 37% higher than Q1 2019 and 15% above the 10-year average. The Southern sector accounted for 56% of office take up in Q1 2020 most significant of which was the Government Property Agency’s pre-let of 333,000 sq ft at Ruskin Square, East Croydon.
There was limited evidence in Q1 2020 of the impact of Covid-19 on the market. This is largely to do with the lock down and associated social distancing measures coming into effect in mid March. The initial pause in the market has been more apparent in smaller occupiers. However, analysis has shown that in the first month since the lockdown deals have continued to be signed or pre-lets agreed, and there is still new occupational demand.
The new developments in the market are attracting higher rent levels which has resulted in consistent rental growth. Record rents have been achieved in neighbouring boroughs including Slough and Woking in Q1 2020 where up to £38.00 per sq ft were achieved. Average Grade A rents across the market have increased by 4% since the end of 2019 and stand at £36.25 per sq ft.