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2023 London Office Market Predictions

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The 2023 London office market looks to be characterised by a number of primary influencing factors. These drivers of change, and the trends that will be solidified as a result, include: record completions, lowering lease lengths, ongoing recovery in the flexible workspace sector, and a supply crush of prime office space due to a continued flight to quality.

Read on to find out more about how these, and other factors, are going to shape London’s prime markets in 2023 and beyond.

Stats Hinting Towards the Future of the London Office Market

  • 13.6 million sq/ft of office space is under construction
  • Around 9 million sq/ft of office space is scheduled for delivery in 2023
  • Over 50% of projects are targeting ‘Outstanding’ or ‘Excellent’ BREEAM sustainability ratings
  • Forecasts for construction price inflation have blown out to 6.1%, up from predictions of just 3.8% at the start of 2022
  • Around 12% of the West End’s under development office product is pre-let

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Central London Office Market Report Q2 2022

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Central London Market Overview

Over the past few years, most major UK office markets have witnessed an occupier flight to quality. The priority seen when it comes to the leasing and acquisition of high quality office space is understandable, particularly when you consider the volatility and uncertainty that dominated the global commercial real estate market in recent times. As a wide range of businesses, particularly SMEs, continue to be unsure about whether or not in-person working will return to prior prominence. This reality makes putting pen to paper especially difficult, as physical occupancy levels remain difficult to gauge and physical spaces become harder to justify.

A flight to quality makes sound investment sense in a volatile market, largely due to high-end assets tending to at least retain their value during periods of uncertainty. Additionally, large firms with a heavy investment in the smooth transition back to the office, both in terms of time and money, have sought to secure quality space to attract their workforces back in a physical capacity.

This priority for tenancy in Grade A office space has been extremely clear in London for a number of years, resoundingly consolidating itself during the pandemic and continuing to show no signs of abating.

So, how exactly is the Central London office market faring after years of upheaval? In this Central London office market report, we take a look at the most current industry data, explore ramifications of this data, and predict where currently observed trends will lead us.

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