• Q3 Office take-up in Central London increased by 11% from Q2
  • Vacancy rate fell to 4% in Q3 2019
  • Under offers rose by 5% to 4.4 million sq ft, far exceeding 10-year average of 3.1million sq ft

Central London office occupancy levels have remained robust in Q3 2019, with take-up and under-offers increasing and the vacancy rate falling.

Take-up in Central London increased 11% compared with Q2 2019, to 3.4 million sq ft; exceeding the ten-year quarterly average of 3.3 million sq ft. This represents a marginally higher take-up of space than during the same period last year (an increase of 0.3%). New and pre-let take up represents 45% of the quarterly total, reflecting occupier preference for new and high-quality space. Secondhand take-up totalled 1.9 million sq ft, as take-up of this type fell just below the 10-year average. The business services sector (which includes flexible office operators) represented 37% of take-up in Q3, followed by the banking and finance sector, accounting for 24% of total take-up.

The vacancy rate fell to 4% from the Q2 2019 rate of 4.1%, with availability falling by 3% in Q3. While availability of newly completed and new early marketed supply has fallen, secondhand space availability was above the ten-year average, at 91 million sq ft, rising by 1% during Q3 2019.

Under offers totalled 4.4 million sq ft at the close of Q3, a 5% increase on Q2. These were up significantly in the Docklands (+166%), City (+1%) and Midtown (+9%).

Kevin McCauley, CBRE's Head of Central London Research
“Demand for space in Central London remains robust, with new, high-quality space proving especially popular. Extremely low levels of vacancy, coupled with a very limited development pipeline, have created conditions for rental growth, with almost all markets seeing an increase in rental values during the quarter.”
Kevin McCauley, CBRE's Head of Central London Research