A resurgent London office market allowed the UK’s commercial real estate sector to finish 2023 with an unexpected bang, according to new figures from EG Radius.
The figures, drawing together data submitted by the UK’s biggest property agents, reveal that the final quarter of 2023 was a flurry of activity, with year-on-year growth in many sectors and submarkets.
See also: EG Radius reveals most successful agents in Q4
Just over 70m sq ft of space was let across the UK’s office, industrial and retail sectors in 2023, with almost 40% of this transacting in the final quarter of the year as momentum accelerated. The figures paint a picture in which all three sectors enjoyed a Q4 in which transactional volumes were roughly double those of the opening three months of the year.
The industrial market had been on a downward trajectory since the pandemic-led boom in the logistics sector, but saw recovery with Q4 nationwide take-up of 15.4m sq ft, up by more than 50% on the equivalent period in 2022.
Leading the charge in London’s office market were the City core and West End. In the City, fourth-quarter take-up almost doubled year-on-year to 2.9m sq ft. In the West End, Q4 activity increased by roughly a third over the same period to hit 1.6m sq ft.
The most notable leasing transactions of 2023 included HSBC’s 556,000 sq ft deal to take office space at 81 Newgate in St Pauls, EC1, in what will be a move out of its long-time headquarters in Canary Wharf; law firm Kirkland & Ellis’s 215,000 sq ft leasing at M&G Real Estate’s 40 Leadenhall, EC3; and social media giant TikTok’s prelet of the entire 140,000 sq ft of Topland Group and Beltane Asset Management’s Verdant development in Farringdon, EC1.
In the West End, deals included Chanel taking the entire 86,000 sq ft at 38 Berkeley Square, W1, for its new London headquarters and European alternative asset management firm Hayfin’s deal to take around 23,000 sq ft across two floors of Grosvenor’s landmark office development at 65 Davies Street, W1, as revealed by EG.
The office upswing was not only confined to London. In Q4 2023 the nationwide office transactional total stood at more than 10.2m sq ft, up by more than 30% on the equivalent period in 2022.
The UK’s investment market, which had been in the doldrums since last year, also witnessed recovery, with more than £2bn transacted in Q4 compared to the £1.3bn average of the preceding three months and the £1.7bn transacted in the equivalent period of the previous year. In total, some £6.2bn was transacted through investments across all sectors in the UK in 2023.
To send feedback, e-mail chante.bohitige@eg.co.uk or tweet @bohitige
