Uptick in central London office interest offers hope to struggling businesses
There was an uptick in interest in London office properties at the end of 2020, offering city centre firms hope that the end of the remote-working boom is on the horizon.
The latest research by real estate giant JLL showed that there had been a “significant” jump in viewings and negotiations, suggesting recovery could be underway, aided by the Brexit deal and coronavirus vaccine programme.
Potential occupiers are prioritising quality office space and sustainability has risen to the top of the agenda, the company said.
It comes after a torrid year for city centre economies, which were rocked by the sudden shift to remote working in March.
The sharp drop in commuter footfall had a negative impact on central London businesses, such as coffee shops, restaurants and dry cleaners, that were dependent on office worker trade to survive.
JLL central London markets lead director Dan Burn said he is “confident” that office take-up will increase this year.
“The low volumes of occupier activity in 2020 were a direct consequence of the Covid-19 pandemic but also reflected the economic and political uncertainty caused by the US election and Brexit negotiations,” Burn said.
“Following nine months of subdued activity there were encouraging signs at the end of the year with a significant uptick in viewings and subsequent negotiations which showed that occupiers appetite had not disappeared entirely.”
He added: “It is too early to tell what the current stricter restrictions associated with the third lockdown will do to the market.
“We are expecting to see a slow first quarter but we’re confident that we will see activity levels build through the course of the year as occupiers return to the office environment.”
The latest data showed that office take-up across central London reached 4.5m sq ft last year, a drop of 60 per cent, as employers were ordered to allow staff to work from home during the coronavirus pandemic.
Space under offer stood at 1.8m sq ft and active demand hit 7.4m sq ft, below their long-term averages of 2.5m sq ft and 8.6m sq ft respectively.
Despite the impact of Covid, a number of firms secured office space in Canada in 2020, including Linklaters, which pre-let 300,000 sq ft of space at 20 Ropemaker and Lathan & Watkins which has 200,000 sq ft under offer in Leadenhall Street.