• Q4 Office take-up in Central London topped ten year quarterly average by 9%
• This represents a 4% increase on Q3 take-up
• Office vacancy rate fell by 4% from Q3 2019
• Overall take-up increased despite a fall in take-up by flexible office operators, following a peak of activity in Q3

London, 20 January 2020 – Central London office occupancy levels remained strong in Q4 2019, with take-up increasing and the vacancy rate falling compared with the prior quarter.

Take-up in Central London in Q4 2019 increased 4% compared with Q3 2019, to 3.6 million sq ft; exceeding the ten-year quarterly average of 3.3 million sq ft. Despite a decrease in the amount of space taken by flexible office operators (following heightened activity in Q3), overall take-up increased on the previous quarter, with healthy levels of take-up activity across a range of different sectors. The business services sector (which includes flexible office operators) remained the largest proportion of Q4 take-up, at 25%, followed by banking and finance (23%) and creative industries sectors (21%).

The final quarter of the year saw two deals larger than 100,000 sq ft: Facebook’s acquisition of 144,500 sq ft at 10 Brock Street, Regent’s Place, Euston and Monzo leasing 122,300 sq ft at Broadwalk House, Broadgate, EC2. The Monzo deal was one of 12 deals of over 10,000 sq ft to FinTech companies during the year.

The supply shortfall continued in Central London in Q4 2019, with availability falling to 12.3 million sq ft. This is significantly lower than both the ten-year average (14.1 million sq ft) and the same period in 2018 (14.3 million sq ft). Under offers reached 3.5 million sq ft in Q4 2019, remaining above the ten-year average of 3.1 million sq ft.

Central London take-up for the full-year 2019 totalled 12.8 million sq ft, a decrease of 7% from 2018.

Simon Brown, Director, CBRE UK Research, comments: “The diverse nature of Central London office occupancy provides an exceptional degree of resilience and this supported healthy levels of take-up, both for the final quarter of 2019 and across the year as a whole. Looking ahead, we expect the occupier markets to remain strong in 2020, with under offers above trend and a high level of demand. Against a backdrop of low and tightening supply, we expect further rental growth.”