Central London office take-up boosted in Q3 2023, attributed to the return of large deals, and occupier confidence slowly returning for the right assets. Grade A activity continues to dominate the market, with demand for these offices keeping prime rents at record highs.
Key findings from our Q3 2023 report indicate that:
- Take-up in Central London totalled c. 2.77m sq ft in Q3 2023, up 40.2% quarter-on-quarter.
- Bifurcation of the market continues, with over 80% of transactions this quarter being of Grade A quality.
- Prime rents have been held at record highs by occupier demands, West End increasing to £150 per sq ft and City remaining at £72.50 per sq ft.
- Supply slightly increased during during Q3 2023, but remaining below Q3 2022. Vacancy increased to 9.6%, which remains above the ten-year average.
- Central London investment volumes totalled £1bn in Q3, down 14.2% quarter-on-quarter, as uncertainty regarding inflation and interest rates persists.
- Prime office yields have continued to move out, with 4.15% in the West End and 5.75% in the City, representing a quarterly increase of 15bps and 50bps respectively.
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