With UK business confidence remaining comparatively weak since the EU referendum, it would be reasonable to assume that demand for London office space would be cooling.

However, while take-up of central London offices did fall year-on-year in 2016, 2017 and 2018 have been very different. Last year, the amount of offices let across the City of London and West End totalled 12.6 million sq ft – the highest level of take-up in 20 years.

Another sign of confidence in London is the type of companies taking space and the length of commitment. 2017’s largest letting in the City – 564,000 sq ft at 21 Moorfields to Deutsche Bank – was significant on two levels: a German bank committed to a large new HQ, and it did so on a pre-let of a building that won’t be delivered until 2021.

Given that much of the post-referendum speculation has focused on the prospects of jobs in banking and financial services leaving London, it may also come as a surprise that businesses from that sector acquired 2.4 million sq ft of office space in central London last year, 15 per cent of the total. Other acquisitive sectors were the serviced office providers (19 per cent of the total) and creative and technology businesses (26 per cent).

2018 has seen take-up levels maintained, with the volume of offices leased in the City and West End reaching 5.6 million sq ft at the half year; marginally up on the same point last year. But this year’s seen a slightly different tone around who’s driving demand. During the first six months, the largest deal in the City was 600,000 sq ft at Royal Mint Court for the new Chinese Embassy. This made the public sector the largest acquirer of offices, although insurance and financial services companies have also taken 825,000 sq ft of space (21 per cent of the total).

In the West End, the rise of the global tech titans continued with Facebook’s pre-let of 600,000 sq ft in King’s Cross. Once it, Google, Amazon and Apple move into all the space they’ve acquired recently they’ll occupy more than 4 million sq ft in central London. What’s perhaps more important is that the majority of this space has been acquired since the referendum.

Looking ahead, the story appears equally positive. Currently there are active requirements for more than 7.2 million sq ft of offices from companies as diverse as the European Bank for Reconstruction and Development, Merck, and Samsung. Some 34 per cent of this demand is from the banking and financial sector and 19 per cent is from the technology and creative industries.

While the mood music around a hard Brexit has picked up pace, it’s apparent that office-based employment in London will grow for the foreseeable future. Businesses are more cautious than they were, but larger companies are planning through the period of uncertainty and taking a view that London remains a major part of their European and global networks regardless of Brexit.

How to slice 7.2 million sq ft

The requirements, by business sector, for central London office space

Source: Savills Research

Further information

Read more: City Office Market Watch

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