Central London office analysis

Our quarterly review of the central London office occupier and investment markets

Type Research

Date 29/01/2019

Our latest review of the central London office market looks at activity in central London during the final quarter of the year.

Central London take-up rose to 3.5 million sq ft for Q4 2018, up 42% on the long term average. Take-up reached 12.8 million sq ft for the year, up 30% on the long-term average.

The TMT & Creative sector made up the majority of take-up for Q4 at 22%, followed by Serviced Offices at 18%. There were four transactions over 100,000 sq ft for Q4 2018 of which the largest was WPP Group’s acquisition of 1 Southwark Bridge Road, SE1. Prelets continued to dominate particularly the City market with acquisitions by Interpublic Group at 135 Bishopsgate, EC2 and Jane Street Capital at Premier Place, EC2.

Availability fell to 10.8 million sq ft for Q4 2018, down 10% on the 10-year average. Strong leasing activity and a continued lack of development supply caused the fall, despite rising tenant-offered space. The Central London vacancy rate currently stands at 5.6%.

Investment transaction volumes reached £4.3 bn for Q4 2018, 21% up on the 10-year average. This took the annual figure to £18.3 bn, 28% up on the 10-year average and the highest yearly volume for transactions since 2013. Yields are currently stable at 4.25% in the City and 3.50% in the West End.