Real Estate Market Outlook
The Central London occupational market has held up well over the last 12-months, with the very best schemes across the market leasing well. As a result, there is diminishing supply of the best quality space, creating a three tier market between premium assets, where rental values are accelerating at pace, prime supply and the rest of the market.
Take-up of Grade A office space in Central London reached 2.44 million sq ft during the first half of 2023 as occupiers continue their focus on the best buildings and locations. Whilst overall H1 volumes have reduced, both on H1 2022 by 28% and the five-year H1 average by 9%, Grade A volumes increased, by 2% when compared H1 2022 and by 7% on the five-year H1 average.
In the investment market, £8.5 billion has traded across the market in the 12 months to Q2 2023, and as with the leasing market, acquisitions in the West End made up a large portion of activity during the quarter. As we look towards the second half of 2023, we expect to see a continuation of activity at the smaller end of the market, as well as demand for assets that provide value add opportunities – both for occupiers and investors.
