Savills News

South East & Greater London office market records 2.7 million sq ft of take up in 2024

The Greater London and South East office market recorded 2.7 million sq ft of take-up in 2024, reflecting a modest 4% decrease on 2023. The reduction in transactional activity can be partly attributed to lower levels of take-up recorded in Q4 2024, according to the international real estate advisor Savills.

Business sentiment was tempered following the Autumn Budget which was reflected in the take-up figures in the final quarter, with 624,000 sq ft of take-up recorded in Q4 2024 which was 52% below Q4 2023 and 34% below the five year average.

 

Deals completed in the 10,000-19,999 sq ft size band increased notably with 63 transactions recorded. This was 62% above the total recorded in 2023 and the highest total recorded for this size band since 2019. There were also no deals recorded over 100,000 sq ft in 2024, which is only the second time this has happened since 1991.

 

The South East markets which experienced the highest levels of take-up were Reading, Chiswick and Maidenhead. Notably in Reading, there was 523,000 sq ft of take-up recorded which was 28% above 2023 levels and the highest total since 2019. Rental growth has also continued across the market with 16 submarkets achieving record high headline rents in 2024.

 

The outlook for 2025 remains relatively positive, with steady demand across the majority of the greater London and south east markets, and an anticipated continuing reduction in market vacancy rate, decreasing from 9% in 2023 to 7% in 2024.

 

Andrew Willcock, head of Greater London and South East office agency at Savills, says: “We finished last year only slightly down on the year before. The reduction in take-up can be attributed to the lack of deals recorded in the over 100,000 sq ft category and the hit to business confidence at the end of last year due to the Autumn Budget. To achieve only 4% less take up on 2023 levels shows the resilience in demand when 100,000 sq ft plus lettings typically account for 15% of total annual take up.

 

“As we move into 2025, we expect demand to be on par or improve on 2024 levels. There are several high profile larger requirements from corporate occupiers in the market and we currently have over 1 million sq ft of space under offer, with strong take up predicted for Q1 2025.  The big caveat of course is a ‘stable’ economic environment moving forwards.

 

“The challenge will be the lack of speculative, prime stock entering the market and this could temper take up, with occupiers having no or very limited best in class workspace in their preferred location.”

 

Robert Pearson, Director in the UK Tenant Representation team at Savills, adds: "Occupiers are increasingly prioritising flexibility and quality in their office space decisions. The notable increase in mid-sized transactions reflects businesses’ focus on creating dynamic work environments that cater to hybrid working practices. With the limited supply of Grade A offices and rising costs of relocation and fit-outs, many occupiers are engaging with landlords to upgrade existing spaces to meet their evolving needs. This collaboration is not only helping businesses align with sustainability goals but also ensuring they remain competitive in attracting and retaining talent."

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