The City of London recorded the joint highest number of office leasing deals in a calendar year in 2023, according to new data produced by Cushman & Wakefield.
Last year, there were 331 office transactions of more than 5,000 sq ft in the City of London, which equals the totals recorded in 2015 and 2018 – the highest in the last decade. Of the 331 deals in the City, 245 transactions were signed either by new market entrants or existing firms relocating within Central London.
However, the firm’s annual London Moves report recorded a total of 545 office deals in Central London in 2023 – 9% lower than 2022’s record levels. Activity was buoyed by a significant number of smaller transactions between 5,000 sq ft and 25,000 sq ft, with just seven deals of more than 100,000 sq ft recorded.
Last year also saw the largest number of existing Central London office occupiers relocating to new premises within London since 2015, with 342 movers, equating to 6.22m sq ft of deals. Of these, 172 businesses moved into a new submarket (‘relocator’), while the remaining 170 acquired new space within the submarket of their previous location (‘stayer’).
West to East migration remained the dominant trend, with the City core submarket witnessing the largest concentration of movers since 2015, with 130 moves (39 relocators, 91 stayers). Some 46 occupiers relocated out of the West End into the City – also the highest figure since 2015 – while 14 moved the other way.
In 2023, 326 existing Central London occupiers expanded on their overall footprint by a total of 3.63m sq ft. The number of companies expanding their footprint was more than three times the number reducing their office space. Overall, 91 occupiers reduced their office space by a combined total of 1.77m sq ft.
Ben Cullen, head of UK offices at Cushman & Wakefield, said: “It is no longer just cost that is the primary driver for moves, as was the case pre-pandemic. Supply has taken precedence, most acutely in relation to grade A space, which is a scarcity in many of the West End submarkets, forcing occupiers to widen their search radius. Some are taking the approach of regearing or renewing existing leases for the short-term, awaiting a period when appropriate space may become available.
“The City of London’s office leasing market is characterised by high volume and high resilience, despite some of the major occupiers relocating. The City’s record leasing activity reflects its enduring status as a globally competitive business hub and destination of choice for many occupiers.
“Whilst we expect some large-scale occupiers to downsize or consolidate their offices, the volume of expanding occupiers demonstrates Central London’s desirability as an office centre for both small and larger businesses, countering the narrative that all occupiers are downsizing amid challenging economic conditions.”
