Central London office take-up concluded 2023 with Q4 recording the highest take-up of the year, boosted with multiple large deals in both the City and the West End. Grade A deals led the way across the market, accounting for majority of lettings, and keeping rents at record high levels.
Key findings from our Q4 2023 report indicate that:
- Take-up in Central London totalled c.3.7m sq ft in Q4 2023, and pushing annual take-up for 2023 to 11.1m sq ft.
- Grade A leases accounted for 75% of all transactions in 2023, and continue to keep prime rents at record levels, with demand from occupiers increasing West End to £150 psf and City stabilising at £75 psf.
- Supply reached 27.2m sq ft to close out 2023, which remains in line with the five-year average, and only marginally down on Q4 2022. Vacancy in Q4 2023 was 9.5%, which is higher than the five and ten year average.
- Central London investment volumes totalled £1.6bn in Q4, an increase of 54% quarter-on-quarter, as investor sentiment tentatively improves.
- Prime office yields have remained steady, thanks for falling long-term interest rates, with 4.00-4.25% in the West End and 5.75% in the City.
