Quarterly office take-up in London’s West End is highest it’s been in three years

Savills has recorded the highest monthly take-up of London West End office space it’s seen since December 2019, highlighting a growing momentum amongst occupiers deciding to re-activate requirements or upgrade their offices. A flurry of deals in September took monthly take-up to 595,986 sq ft, across 31 transactions.

An analysis of Q3 activity revealed 1.5m sq ft of leasing transactions complete overall, across 91 deals. This is the highest quarterly take-up to occur since Q3 2018, and brought the year-to-date total to 2.75m sq ft, 92 per cent above where it stood this time last year. Although, Q1–Q3 take-up is still down on the 10-year long-term average by 11 per cent, largely due to the subdued first and second quarters.

The largest transaction to complete last month, and also the largest of the year so far, was Facebook’s assignment from Aegis at 1 Triton Square occupying the whole building (312,000 sq ft) on a 15-year lease with a rent that is confidential at present.

As well as strong levels of take-up, there is also a large amount of space under offer in the West End. Last month saw 223,945 sq ft of space go under offer, taking the total to 1.3m sq ft. This is 28 per cent above the long-term average and also 24 per cent above where it stood at the end of Q2.

Looking further at this space the demand for high-quality office space becomes clear. Grade A space and new stock in the development pipeline make up 82 per cent of the total amount of space under offer, while Grade B demand continues to fall. This trend of ‘flight to quality’ is one that was present before the pandemic; however, Covid-19’s catalytic effect on creating a two-tier market has become clearer as 2021 has progressed.

With momentum beginning to pick up again, it is not surprising that requirements across Central London and the West End also continue to remain at high levels. At the end of September active requirements reached 5.3m sq ft with the Professional, Tech & Media, and Insurance & Financial sectors all accounting for 23 per cent of active requirements each.