Our quarterly review of the central London office occupier and investment markets
Central London take-up totalled 3.3 million sq ft in Q4 2019 which was 28% above the 10-year average. Overall 2019 take-up totalled 12.3 million sq ft, making it the second strongest year on record. The Central London development pipeline continues to be starved of options, while under construction space remains in high demand, setting the market up for a strong start to 2020.
Steady take-up despite market uncertainty is partly the result of booming hybrid sectors, primarily Fintech which has seen rapid growth in London to become one of the city’s top performers. In Q4 2019, hybrid occupiers such as Monzo and Deloitte Digital took space, these two acquisitions alone accounted for a combined 15% of City take-up. With Fintech now an established component of the Central London office market, 2020 may see other hybrid sectors rise in importance, such as Proptech and Legaltech. Meanwhile, the serviced office sector has entered its next stage of maturity as we see more consolidation on the horizon. The sector accounted for just 16% of take-up for the quarter, which was a drop on Q3 2019’s 23%.
With just 3.4 million sq ft of available stock currently due for completion in 2020 across all size bands, the market may be facing a supply shortage in the coming year, putting positive pressure on rental levels throughout Central London.