The first quarter of 2021 saw 27% more office space leased across central London than in Q4 last year, according to research – despite Covid lockdowns being reinstated in January.
Q1 this year saw 1.6m sq ft of office space leased across the capital’s main office markets, a figure which remains 54% below the long-term quarterly average.
The average deal size in Q1 this year was 7% up on the previous quarter, at 6,812 sq ft, according to the research by occupier-only consultancy DeVono Cresa.
As a result of the still low levels of leasing activity, office availability across central London increased by a further 8% during the period, now just shy of 20m sq ft.
The pace of this was slower than that seen during 2020, however, with the concentration of these increases having moved away from the traditional markets of the City and West End.
The greatest rise in office availability over the past quarter was in markets that saw slower growth in 2020, with East Fringe up 32%, Southbank up 20% and Docklands up 14%.
“Rents are on average 6% lower than at the same point last year. Under market pressure, landlords continue to improve their incentive packages with rent-free periods widening out to 25-30 months on a 10-year lease. Coupled with lower asking rents, the range of opportunities for tenants have increased,” said Shaun Dawson, Head of Insights at DeVono Cresa.
The research indicates that the City now has the highest level of availability since Q1 2013, at 7m sq ft, having risen by 2% over the quarter. The West End has tipped 4m sq ft of availability for the first time in two years and the East Fringe market is now at a historical high of 1.2m sq ft.
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