Fri, 10/02/2023 - 12:00
· 1 min read

Central London Office Market Update Q4 2022

Central London office demand has shown levels of consistency in Q4, totalling c.3.0m sq ft, with pent up demand playing a significant factor.

This brings the 2022 total take-up figure to 12.2m sq ft. Demand has shown consistent levels of recovery despite some occupier consolidation and the revolution of hybrid working.

Key findings from our Q4 2022 report indicate that:

  • Take-up in Central London totalled c.3.0m sq ft in Q4.
  • Take-up levels, whilst down when compared to Q3, bring 2022 totals to 12.2m sq ft, which is in line with the 10-year average.
  • The Central London office market has shown a strong level of resilience despite some occupier consolidation and the hybrid working revolution.
  • Supply decreased by 9% to 18.2m sq ft and the Vacancy Rate decreased at the end of 2022 to 8.2%.
  • The Central London office market saw just £0.7bn of investment transactions in Q4 – 83% down on Q4 2021, the lowest Q4 total for over 20 years.
  • 2022 total volume stands at £11.5bn, notwithstanding the pandemic-hit 2020, represents the lowest annual volume since 2010.
  • The slowdown can be attributed to the rapid rise in interest rates to combat high inflation, which caused a dramatic repricing of debt.
  • The political turmoil in September only exacerbated negative sentiment and caused further outward movement in risk-free rates, although they have since normalised.
  • In turn, price discovery became elusive, causing many investors to press pause and leaving c. £7.0bn of assets marketed in 2022 still unsold.

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Central London Office Market Update Q4 2022