In the second quarter of this year, Central London take-up totalled 1.6m sq ft, reflecting a 23% quarter-on-quarter increase. This brings H1 2021 take-up to 2.9m sq ft which is 26% down on the same period last year (4.0m sq ft) and 30% below 10-year average.
The West End and Southbank markets in particular recorded strong take-up levels this quarter at 0.5m sq ft and 0.2m sq ft respectively, both marking this quarter the highest level of take-up since the beginning of the pandemic.
Supply across Central London increased just 3% on the previous quarter reaching 19.3m sq ft in Q2 2021. This equates to a vacancy rate of 8.6%, significantly up 248bps on the 10-year average of 6.1%. This trend was parallel in the City market reaching a vacancy of 10.3%, however, in the West End, the vacancy rate fell marginally to 5.7%.
The Central London office investment market saw a welcome uptick in activity in Q2. Volumes reached £3.6bn, representing a 139% increase on Q1 and strong improvement on the record lows of last year, as well as a 51% increase on Q2 2019. Total Q2 volumes reached £2.06bn and £1.5bn in the City and West End markets respectively. This brought H1 2021 volumes to £5.1bn, which is up 71% on H1 2020 and up 12% on H1 2019.
The largest transaction of the quarter was Brookfield’s purchase of Plantation Place, 30 Fenchurch Street, EC3 for £635m. Other significant transactions included Union Investment’s acquisition of 1 Braham, E1 for £468m and ARA Suntec’s purchase of The Minster Building, 3 Minster Court, EC3 for £353m.
Click to read Central London Office Market Update Q2 2021
