• New data from Cushman & Wakefield underlines the appeal of Grade A office space
• 1.8 million sq ft Grade A space taken in Q3
New data from global real estate advisor Cushman & Wakefield highlights the continued and sustained appeal of Grade A office space in Central London, as leasing take-up volumes exceed the pre-pandemic five-year quarterly average by 4% in Q3 2024.
In Q3 2024, a total of 2.56 million sq ft of take-up was recorded across Central London – up 21% quarter-on-quarter. Grade A leasing continues to dominate activity, amounting to 1.8 million sq ft, equating to 70% of Q3 take-up – well above the ten-year average of 59%.
The City remained the most active market during the quarter, with 1.5 million sq ft trading (67% Grade A), while the West End accounted for 1 million sq ft (74% grade A).
This brings the Q1-3 2024 take-up volume to 6.34 million sq ft (1% above Q1-3 2023) with Grade A activity totalling 4.4 million sq ft – 70% of the total. A further 3.1 million sq ft of space was under offer at the close of Q3, 8% above Q2 and of which 73% was of Grade A quality.
Nonetheless, Central London office supply and vacancy remain elevated when compared to their ten-year quarterly averages, at 27 million sq ft and 9.3% respectively.
Andy Tyler, Head of London Office Leasing at Cushman & Wakefield, said: “Indicators suggest that supply has now broadly stabilised over the last 18 months and we noted a 1% reduction during Q3. With a constrained development pipeline, we should begin to see a reduction in vacancy rate within the next 12 months which in turn should put yet further upward pressure on rental values, especially in key locations.”
At the end of Q3, 15.9 million sq ft remains under construction and expected to be delivered by 2028, with 48% of this already pre-let. This leaves 8.3 million sq ft of space being built speculatively. Of this speculative space, 57% is due to complete by the end of 2025.
