The London office market is recovering. After two years complicated by the impact of the pandemic, office contracting rose to 1.14 million square meters last year, 28% more than in 2021 and a figure that stands at the average for the last ten years, according to Cbre data.
Banking and finance were the most dynamic sectors last year, absorbing 28% of the total rented areafollowed by professional services (17%) and creative industries (17%).
Tenants follow the trend of looking for quality spaces and, in the fourth quarter of last year, 45% of the contracted area (the total was 260,400 square meters, below the average for the last ten years) was new spaces or pre-rentals.
Despite these data, Availability remains skyrocketing and closed the year with a total of 2.4 million square meters of unoccupied offices, 5.8% more than at the end of 2021. The average availability of the last ten years stands at 1.5 million square meters. In the case of central London, however, availability was 251,100 square metres, a figure that is 21% below the average of the last ten years.
Although availability decreased last year in the city center, it remains well above historical records
Availability in central London is dominated by second hand, which accounts for 64% of the total space available at the end of 2022. However, availability in new buildings has increased by 20% (362,000 square metres) as a result of the entry on the market seven new complexes.
Regarding the investment market, London had a good 2022, although in recent months economic uncertainty has dried up the market. In the whole of last year, the volume of transactions in the office market rose to 6,340 million euros (5,600 million pounds), 12% more than in 2021.
Investment in offices in London reached 6,340 million euros last year, 12% more
The investment market was supported for a good half of the year, especially the first three months of the year, since In the fourth quarter, transactions were limited to 792 million euros with only 23 operations closed, the lowest number since the outbreak of the Covid-19 pandemic..
By investment volume, 41% of purchases come from European groups, followed by the United Kingdom (36%), the Middle East (19%) and Asia (4%). The most important transaction of the year was the one carried out in October by Wirtgen, which bought number 50 Finsbury Square from GPE for 250 million euros.
