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Signs of renewed life in London office market with 130 active requirements

06 05 20 serviced offices
Following a quiet 2020, there are signs of recovery in the London office market with new Colliers research highlighting 130 active requirements for office space (of over 3,000 sq ft) across London, totalling over 3 million sq ft. Exactly 50 per cent of the 130 are set to commit to an increase in their office footprint during 2021, with 30 per cent of those from the financial sector and a further 27 per cent from the tech sector. 

Tom Wildash, Co-Head of West End Leasing at Colliers, comments: “The increased number of requirements we have seen in the first quarter of the year is indicative of a changing shift in sentiment towards the office. The prevailing belief from this time last year that the office is dead is weakening with every week of home working.

“Occupiers and landlords alike are now taking time to review their office portfolios in the light of COVID-19. We expect to see redesigns, lower density and greater employee engagement in fit-out plans. While office take-up over the next 12 months will be below trend, there is every reason to expect a surge in demand as 2021 progresses, relative to current levels. Encouragingly, some occupiers are looking to increase footprints rather than consolidate, in order to actualise new office designs.”


This increase in requirements is coupled with a fall in the amount of tenant space being brought to the market. While levels surged in January 2021 with over 370,000 sq ft released to the market, the highest release of space since June 2020 according to Colliers, February numbers fell to 250,000 sq ft and in the first half of March just 30,000 sq ft came to the market. As a result, overall levels of vacancy have stabilised, rising by just 8% in the year-to-date. City and West End levels have only risen modestly in 2021 to date, smoothed by take-up of over 150,000 sq ft of sublease space, something few commentators expected at the turn of the year.  

Guy Grantham, director in the Research & Forecasting team at Colliers, adds: “Tenant-release space has been the main driver of elevated availability across London since the start of the pandemic. However, availability will fall steadily in H2 2021 but may remain stubbornly above trend due to a proliferation of poorer quality non retro-fitted space, where landlords are reluctant or unable to refit secondary stock. There will continue to be a flight to quality as best in class buildings appeal to occupiers who want to create the best environment for their staff.”
 

Download the report


Related Experts

Tom Wildash

Director & Co-Head of West End Leasing

London - West End

Director and Co-head of West End Office Leasing at Colliers International with experience in advising on new office developments and refurbishments, pre-letting campaigns, disposal of tenant space and leasing and marketing advice.

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Alex Kemp

Director & Co-Head of West End Leasing

London - West End

Alex has been working in the Central London Office Market for nearly 10 years, dealing with all aspects of office agency; providing advice to developers, landlords and occupiers in respect of leasing and acquisitions. Alex joined the growing Colliers International Central London team in October 2015 from DTZ and covers the West End, Midtown, Southbank and Northern Fringe office markets. 

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Guy Grantham

Director of Research and Forecasting

London - West End

Guy has been a property research professional for 23 years and gained extensive knowledge of the UK and Global property markets. He has worked closely with a wide variety of major developers, landlords and occupiers in a consultancy capacity. Instrumental in supporting Hines' purchase of Brindleyplace for £200m, on which Colliers advised. He is now specialising in the London Office market using his extensive knowledge and experience to provide market leading insight into current occupier, investment and development trends.

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Rebecca Allen

PR Manager

London - West End

I have been working in commercial property communications for over seven years having previously worked at CBRE and most recently Savills.

In my role at Colliers I am responsible for the PR of national capital markets, London agency and capital markets teams and investment property management.

My role includes:

  • Creating and exectuing PR plans for business lines that span press, marketing and digital channels
  • Media monitoring and reporting
  • Journalist relationship building through face to face meetings, phone calls day to day assistance with stories
  • Reputation management of the Colliers brand

 

 

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