According to Cushman & Wakefield statistics, central London business take-up in Q2 2021 reverted to pre-pandemic levels. Total take-up reached 1.8 million square feet, a 39% rise over the previous quarter and the highest level since the lockdown began in March 2020.

Media and technology were the busiest industry sectors, accounting for 27% of total volumes. Banking and financial businesses made for 18%, while the business sector accounted for 15%. Cushman & Wakefield expects activity to continue on a steady path in Q3, with 2.3 million square feet of space available at the conclusion of the quarter.

“The London office market maintained its rebound in the second quarter as constraints were eased and more occupiers recognized their new ‘normal’ way of working,” said Ben Cullen, head of offices UK at Cushman & Wakefield. The positive findings suggest that demand for office space remains firm, particularly for high-quality stock.”

Prime flagship rental rates in the West End remained steady at €120.33/sq ft and €76.31/sq ft in the City.

Investment activity also increased significantly in Q2, with turnover reaching €3.64 billion, more than five times higher than the same quarter last year and only marginally lower than Q2 2019. North American investors led the push, accounting for 38% of total acquisitions, followed by UK investors, who accounted for 24%.

Over the previous year, activity has been limited by a shortage of stock, but Cushman & Wakefield predicts that more property will come to market to fulfill cooped demand as travel restrictions are lifted further.                             

“London’s office market is starting to feel the benefit of prolonged economic growth and an increase in recruiting,” said Patrick Scanlon, director of UK offices insight at Cushman & Wakefield. This is reflected not just in rising levels of tenant take-up, but also in fairly significant demand from local and international investors wanting to deploy investment in London.

“In 2021, the leasing market will be fueled by forecasts of robust economic growth and job expansion in the office sector. This rising employment market would only encourage the gathering of global capital, which is already eyeing London because of its solid fundamentals and relative bargain compared to other global gateway cities.”

According to the firm, about €2.93 billion of space was available at the end of June, which is expected to enhance investment volumes in the second half of the year.