Central London office demand has shown levels of consistency in Q3, totalling 3.15m sq ft, with pent up demand playing a significant factor. This brings the year to date take-up figure to 9.25m sq ft.
Despite demand showing over-all consistency post pandemic, the macro-economic uncertainty could impact take-up figures in H1 of 2023.
Key findings from our Q3 2022 report indicate that:
- Take-up in Central London totalled 3.15m sq ft in Q3.
- The office market has seen consistent levels of recovery post pandemic, largely due to pent up demand, showing a q/q marginal decrease of 1.4% but an 18.8% increase when compared to Q3 2021.
- Supply increased marginally by 2% to 19.97m sq ft and the Vacancy Rate has stabilised at 8.8%.
- The Central London office market saw £3.2bn of investment transactions in Q3 – 5% down on Q3 2021 and 4% below the 10-year Q3 average.
- Year-to-date volume stands at £11.1bn, the highest Q1-3 figure since 2019.
- The average lot size reached a record high of £141m. Just 23 deals completed over the quarter, the lowest quarterly deal count since Q2 2022.
- Investors have become very cautious as financial conditions become increasingly challenging. Rapidly rising debt costs and risk-free rates have made price discovery elusive and put considerable upward pressure on yields.
Click to read Central London Office Market Update Q3 2022
