Across the City market

May saw a subdued level of take-up with 227,577 sq ft transacting across 19 deals. This brought the total for the year to 1.97m sq ft, across 142 transactions. This is down 2% on the same period last year and down 14% on the long-term average for this period. Despite the slightly subdued take-up this month, there are signs of take-up increasing in the coming months as under-offers have risen since the start of the year and are now 54% above the long-term average.

So far this year the Insurance & Financial Services sector has accounted for 39% of space acquired and the stronger occupier preferences for office space with sustainability credentials is reflected by the fact that 60% of space acquired so far this year has been in BREEAM-rated Excellent or Outstanding buildings, up from 50% from the same period last year. The average prime rent currently stands at £97.68 per sq ft, which is up 13.7% on the same period in 2023.

Highlights

Across the West End market

Although May saw a higher level of space acquired than the previous month, with 183,064 sq ft transacting across 25 deals, leasing activity year-to-date (YTD) remains subdued, at 945,955 sq ft, down 22% on the same period last year and down 14% on the long-term average for this period. Leasing activity has been less core-dominated than in recent years. Only 15% of transactions have been in Mayfair & St James’s so far this year, compared to 29% last year, the lowest since 2019. Similarly, while Financial Services remains the largest sector, accounting for 25% of YTD take-up, this is the lowest proportion since 2020. However, the ‘flight to quality’ trend remains prominent, with the three largest transactions this month taking place at new build or comprehensively refurbished buildings that are either under construction or completed within the last two quarters.

Positively, under-offers have increased steadily in recent months and now stand at 1.29m sq ft, up 64% on the end of 2023, which should hopefully pave the way for a more active second half of the year.

Highlights

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