Grade A office space accounted for two-thirds of leasing activity in Central London in Q1 2023 – the highest quarterly proportion since Q3 2018, according to data from Cushman & Wakefield.
Total take-up in the first quarter hit 1.92m sq ft, of which 1.27m sq ft (66%) was Grade A – 2% below the five-year quarterly average – with a further 3.18m sq ft under offer at the end of March – 6% above the five-year quarterly average.
Of the 127 leasing deals that completed in Q1, 69 took place in March, with 113 of the deals under 25,000 sq ft and four over 100,000 sq ft.
The City market accounted for 57% of total take up, with more than 1m sq ft of deals completing – the West End’s 688,344 sq ft represented 36% of total activity.
More than 400,000 sq ft of space was taken by companies in the banking and finance sector in Q1. Professional services was the second largest sector accounting for a 17% share of activity follow by media, which increased its quarterly share to 15% – more than double the sector’s five-year quarterly average.
Heena Gadhavi, from Cushman & Wakefield’s UK office insight team, said: “The macroeconomic outlook remains cautious and occupiers and landlords are continuing to contend with elevated costs, as a result of sustained inflation, and structural increases to debt servicing costs. While this outlook will undoubtedly impact the leasing market, activity for the first quarter held up well and is in line with the post-pandemic new normal.”
