Grade-A office take-up exceeds pre-pandemic levels

Take-up for grade-A office space exceeded the pre-pandemic quarterly average by 4% in Q3, amounting to 1.8m sq ft – or 70% of all take-up. According to data from Cushman & Wakefield, this brought year-to-date figures to 6.34m sq ft, with a further 3.1m sq ft of space under offer, three-quarters of which is grade-A quality. Central London office supply and vacancy nonetheless remained elevated compared with 10-year averages, coming in at 27m sq ft and 9.3% respectively. At the end of the quarter there was 15.9m sq ft under construction and expected to be delivered by 2028, with 48% already prelet and 8.3m sq ft being built speculatively. Of this speculative space, 57% is due for completion by the end of 2025. Andy Tyler, head of London office leasing at Cushman & Wakefield, said: “Indicators suggest that supply has now broadly stabilised over the past 18 months and we noted a 1% reduction during Q3. With a constrained development pipeline, we should begin to see a reduction in vacancy rate within the next 12 months which, in turn, should put yet further upward pressure on rental values, especially in key locations.” Image © Unsplash