Take-up of office space in Central London fell to 3.74m sq ft during the first half of 2023 – 28% down on the same period last year and 9% down on the five-year H1 average, according to the latest data from Cushman & Wakefield.
The company said that although total take-up for the period was down, the volume of Grade A deals rose to 2.44m sq ft – a 2% increase on the same period last year and 7% up on the five-year H1 average.
In the West End, Grade A volumes accounted for 78% of total take-up – the highest proportion on record in this submarket. Deals below 25,000 sq ft accounted for 60% of all deals completed in H1.
Cushman & Wakefield said 3.55m sq ft was under offer across the Central London market at the end of June – 19% above the five-year quarterly average – with 74% of deals for Grade A offices, reinforcing the ongoing flight to quality trend.
Heena Gadhavi, from Cushman & Wakefield’s UK research and insight team, said: “The Central London occupational market has held up despite a cautious macroeconomic outlook, and the best quality schemes continue to lease well. Although overall leasing activity is down, businesses are more aware than ever of the importance of attracting the right talent with high-quality and well-located spaces. This is reflected across Central London, and no more so than in the record-breaking proportions of Grade A take-up in the West End.
“The flight to quality has been talked about for a while but is now unequivocally borne out by the data, signifying a clear shift in occupier demand. In turn, this is creating a three-tier market between premium assets, where rental values are accelerating at pace, versus prime supply, and the rest of the market.”
