Central London Office Space Sees Uptick After Brexit Vote

Central London office space bounced back from a pre-referendum dip to reach 980k SF in July—24% above the level in June and the strongest monthly average since March this year, according to a new report by CBRE.

Three deals over 50k SF were signed in July, including a major move by Wells Fargo for 220k SF in the city, validating that London was still open for business. The move was seen as a vote of confidence from the banking and financial sector after the Brexit vote. The sector accounted for 31% of takeup in July, followed by the business services sector (22%) and creative industries (17%).

July’s office takeup in Central London remained below the 10-year average of 1.1M SF per month, but above-trend leasing activity in the city and Southbank suggests businesses still see London as an attractive place to locate.

CBRE's head of London leasing, Emma Crawford, said demand for office space remains buoyant. Businesses are still confident about London’s significant advantages as a global business centre, even when the UK is outside the EU. 

Available office space increased by 2% over the month to stand at 13.6M SF, but remained 7% below the 10-year average, as secondhand, completed and pipeline space continues to enter the market. The development pipeline is strong, but much is pre-let, with 46% of the 5.1M SF expected to complete before the end of the year already pre-committed to occupiers.

Office space under offer fell by 14% over the course of the month to stand at 3M SF as a number of large deals completed. However this remains 7% above the 10-year average of 2.8M SF, another indicator of strong demand.