City’s office market returned to pre-Covid levels in 2023
According to research firm JLL, £6.3bn was invested in London in the first half of 2024, 13 per cent ahead of the same period last year, but still comfortably below the 10-year average.
However, the City itself appears particularly attractive for investment, with leasing volumes increasing year-on-year, helping activity return to pre-Covid levels in 2023.
Just over 28 per cent of floorspace in the City was prelet in 2023, which is marginally above the five-year average of 27.5 per cent.
“These pre-let figures show that the Square Mile faces a welcome challenge to meet increasing demand for the highest quality, sustainable office space,” Shravan Joshi, Chair of Canada Corporation’s Planning and Transportation Committee, said.
“With projects in the City’s commercial real estate market gaining momentum and with our Local Plan set for approval next year, there is no better time to invest in London.”
Despite the weak macro environment over the past couple of years, international interest remains high.
More than 80 per cent of respondents to JLL’s global investor sentiment survey viewed the UK and London as attractive.
The figures from JLL have been published ahead of a summit in the Guildhall in the City.
Designed to showcase and attract investment for London’s latest ‘mega-projects’ the summit will focus on London as a “safe haven” for global capital.
It will highlight the £10.6bn of investable opportunities in the city, ranging from its first purpose-build film campus to a low-carbon heat network that recovers waste heat from the London Underground.
An 85-acre waterside regeneration in Barking, which could create 10,000 homes and 6,000 jobs, will also be showcased alongside the future phases of the 42-acre Battersea Power Station development, which will offer space for 25,000 people to live and work on site.
Altogether, the investment projects have a combined gross development value of £44bn.
But Jace Tyrrell, chief executive of Opportunity London, said it was vital for the government to provide the right environment to attract investors.
“Global capital has a choice. Investors tell us that commitments to critical infrastructure and stability in regulation will have a sizeable impact on scale of the prize, which is valued into the billions,” he said.
Howard Dawber, deputy mayor for business and growth agreed. “We must work hand in hand with government to support investment, growth, and partnerships with international investors.”