Office leasing activity in Greater London and the South East reached 1.75m sq ft in H2 2023 – the highest H2 take-up since 2018, according to new data from Savills.
The H2 figure was 93% higher than total take-up in H1 and the Q4 figure of 1.13m sq ft was the highest quarterly total since Q4 2018, 16% above the Q4 five-year average and 7% above the Q4 long-term average.
Andrew Willcock, head of Greater London and South East office agency at Savills, said: “These figures show how sentiment in the Greater London and South East markets improved over the course of 2023. We saw an increase of larger deals, with 16 deals recorded over 20,000 sq ft in Q4 2023 and a rise in deals over 50,000 sq ft illustrating larger corporate occupiers committing to space as the market faces a supply crunch on Grade A offices.
“We expect this momentum to be sustained into 2024, with robust demand for prime Grade A offices. [Some] 41% of the development pipeline that completed in 2023, or is scheduled to complete in 2024, has either been let during construction or [is] under offer. This will support the significant rental growth we anticipate to materialise over the course of 2024.”
Robert Pearson, director in the Greater London and South East tenant rep team at Savills, added: “Occupiers continue to grapple with space requirements, but we are seeing more businesses committing to office space based on data they have collected since the pandemic. Grade A continues to be the viable choice for businesses to ensure staff return to the office and to support corporate aspirations around ESG credentials and commitments.”
