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The central London office market continues to shift in line with previous years\u2019 trends, such as generalised<\/span> downsizing<\/span><\/a> due to<\/span> hybrid work<\/span><\/a> arrangements, a flight to quality, and a limited development pipeline. Although the first quarter of 2024 showed evidence of<\/span> a slowdown in activity,<\/span><\/a> this slow start of the year isn\u2019t concerning considering that the market ended 2023 on a five-year high.<\/span><\/p>\n Here are some key indicators that summarise the status of the London office market in 2024:<\/span><\/p>\n –<\/span> Total take-up levels<\/span><\/a> were 2.47 million square feet in Q1, vs. 2.1 million square feet during the<\/span> same period in 2023<\/span><\/a>.<\/span><\/p>\n –<\/span> Vacancy rates<\/span><\/a> city-wide have increased to 9.5% in Q1 2024, vs.<\/span> 8.9% in 2023.<\/span><\/a><\/p>\n – Lastly, the amount of office space under construction also remains stable, with 15.86 million square feet in 2024 vs. 16.75 million in 2023.<\/span><\/p>\n <\/p>\n Across London, tenants in<\/span> the financial services industry are leading transaction volume<\/span><\/a>, at 36% of the total. Next are professional services with 29%, followed by tech, media, telecom companies, with a 17% share.\u00a0<\/span><\/p>\n The distribution is<\/span> slightly different in the City<\/span><\/a>.\u00a0 Here, insurance and financial services take the lead with a 55% share, which is the highest in 10 years. Tenants in professional services, tech and media have a 17% share each.<\/span><\/p>\n In the<\/span> West End<\/span><\/a>, financial services firms also lead with over 30% of all transactions, followed by serviced office providers. Retail and leisure are increasing their requirements in this sub-market.<\/span><\/p>\n By mid 2024,<\/span> total activity levels<\/span><\/a> amounted to 1.97 million square feet, which represents a 2% year-on-year decrease and a 14% drop from the long-term average. In<\/span> the City<\/span><\/a>, more than 1.78 million square feet were transacted and a further 1.8 million are under offer.\u00a0<\/span><\/p>\n In the West End, leasing activity remains subdued at its lowest level since early 2021, with approx 755,000 square feet transacted and 1.2 million under offer. The highest activity levels by sub-market are found in<\/span> Soho<\/span><\/a> and<\/span> Hammersmith<\/span><\/a>, both with 19% of the total for West End offices. This is possibly due to the low availability in other in-demand areas, such as<\/span> St James<\/span><\/a> and<\/span> Mayfair<\/span><\/a>.\u00a0<\/span><\/p>\n So far this year,<\/span> the largest deal<\/span><\/a> was closed in the<\/span> Docklands<\/span><\/a> (94,500 square feet), and the second largest was closed in the City (85,300 square feet).<\/span><\/p>\n Vacancy rates<\/span><\/a> city-wide average 9.5%, showing a slight increase over the previous year.\u00a0<\/span><\/p>\n In the City, office vacancies have stood around the 9% mark, whereas in the West End they are at their lowest since 2008 at around 7.5%. Overall, the<\/span> highest vacancy rates<\/span><\/a> are in the City and<\/span> Southbank<\/span><\/a>, except for city core markets (4.9%) and Midtown (3.9%).<\/span><\/p>\n The biggest changes in central London office availability on a year-on-year basis have taken place in Docklands and<\/span> Stratford<\/span><\/a>, where they\u2019re close to a 17% increase, and in the West End with an 11% increase. On the other hand, City and Southbank sub-markets have had a rather stable performance at 2%.<\/span><\/p>\n There have been no changes in terms of the sub-markets commanding the city\u2019s minimum and maximum average asking rates. The lowest rental rates can be found in<\/span> east<\/span><\/a> and south east London, whereas the highest remain linked to the West End.\u00a0\u00a0<\/span><\/p>\n Docklands \u00a332.5<\/span><\/p>\n Stratford \u00a348.5<\/span><\/p>\n Canary Wharf<\/span><\/a>,<\/span> Whitechapel<\/span><\/a>,<\/span> Aldgate<\/span><\/a>, White City \u00a357.5<\/span><\/p>\n Vauxhall<\/span><\/a> \u00a360<\/span><\/p>\n Bloomsbury<\/span><\/a> \u00a377.5<\/span><\/p>\n Southbank, Midtown \u00a380<\/span><\/p>\n Paddington<\/span><\/a> \u00a385<\/span><\/p>\n Covent Garden<\/span><\/a>, City Core \u00a387.5<\/span><\/p>\n Victoria<\/span><\/a>,<\/span> King\u2019s Cross<\/span><\/a>,<\/span> Euston<\/span><\/a>,<\/span> Clerkenwell<\/span><\/a>,<\/span> Farringdon<\/span><\/a> \u00a390<\/span><\/p>\n Fitzrovia<\/span><\/a> \u00a395<\/span><\/p>\n Knightsbridge<\/span><\/a>,<\/span> Chelsea<\/span><\/a> \u00a3100<\/span><\/p>\n Marylebone<\/span><\/a>, Soho \u00a3105<\/span><\/p>\n Mayfair, St James \u00a3150<\/span><\/p>\n The City \u00a3108 \/ sq ft<\/span><\/p>\n West End \u00a3200 \/ sq ft<\/span><\/p>\n Grade A office space in the West End continues to be higher priced than comparable spaces in the City, with averages of \u00a379 \/ square foot in the West End vs. \u00a366 \/ square foot in the City.<\/span><\/p>\n Battersea<\/span><\/a>, Nine Elms \u00a335\u00a0<\/span><\/p>\n Hackney<\/span><\/a>,<\/span> London Fields<\/span><\/a> \u00a335\u00a0<\/span><\/p>\n Camden<\/span><\/a>,<\/span> Kentish Town<\/span><\/a>,<\/span> Chiswick<\/span><\/a>, Stratford \u00a345<\/span><\/p>\n Canary Wharf, Hammersmith, City, Whitechapel, Aldgate \u00a350<\/span><\/p>\n London Bridge<\/span><\/a>, Southbank \u00a365\u00a0<\/span><\/p>\n Shoreditch<\/span><\/a>,<\/span> Old Street<\/span><\/a>, Midtown \u00a370\u00a0<\/span><\/p>\n Holborn<\/span><\/a>, Bloomsbury \u00a372.50\u00a0<\/span><\/p>\n Paddington \u00a375\u00a0<\/span><\/p>\n Victoria, North<\/span> Oxford Street<\/span><\/a>, Covent Garden, Clerkenwell, Farringdon\u00a0 \u00a380\u00a0<\/span><\/p>\n Knightsbridge \u00a382.50<\/span><\/p>\n Soho \u00a385\u00a0<\/span><\/p>\n St. James\u2019s, Mayfair \u00a3115\u00a0<\/span><\/p>\n Battersea, Nine Elms \u00a320\u00a0<\/span><\/p>\n Hackney, London Fields \u00a325\u00a0<\/span><\/p>\n Stratford \u00a330\u00a0<\/span><\/p>\n Whitechapel, Aldgate, Chiswick, Canary Wharf \u00a335\u00a0<\/span><\/p>\n Camden, Kentish Town \u00a340\u00a0<\/span><\/p>\n Midtown \u00a350<\/span><\/p>\n King\u2019s Cross, Euston, London Bridge, Southbank, Shoreditch,<\/span> Old Street<\/span><\/a> \u00a355\u00a0<\/span><\/p>\n Covent Garden \u00a357.50\u00a0<\/span><\/p>\n Knightsbridge \u00a360<\/span><\/p>\n Victoria, Paddington, North Oxford Street, Clerkenwell, Farringdon \u00a362.50\u00a0<\/span><\/p>\n Soho, Holborn, Bloomsbury \u00a365<\/span><\/p>\nTop tenancy sectors in London\u2019s office market<\/b><\/h2>\n
Activity levels<\/b><\/h2>\n
Vacancy rates<\/b><\/h2>\n
Average asking rates by sub-market<\/b><\/h2>\n
Lowest asking rates (under \u00a350 \/ square foot)<\/strong><\/h3>\n
Mid-range (\u00a351-\u00a399 \/ square foot)<\/strong><\/h3>\n
Highest asking rates (\u00a3100 and above)<\/strong><\/h3>\n
Highest rents achieved in 2024<\/strong><\/h3>\n
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<\/p>\nAverage asking rent by office grade<\/b><\/h2>\n
Grade A office rates by sub-market<\/b><\/h3>\n
Grade B office rates by sub-market<\/b><\/h3>\n
Top 5 highest rents for Grade A offices<\/strong><\/h3>\n