City office take-up double last year’s figure, says Savills

Office leasing activity in the City of London during September was some of the strongest of the year, with 718,656 sq ft transacted, research from Savills has revealed. This takes total office take-up in the City in 2022 to date to 4.3 m sq ft, almost double last year’s figure of 2.8 m sq ft, and puts it 5% ahead of the five-year long-term average for this point in the year, said Savills. Leases signed in September included law firm Addleshaw Goddard taking 114,000 sq ft on part of the ground and second to seventh floors at 41 Lothbury, EC2 (pictured), at £75 per sq ft on a 15-year term. Apple also exercised its option to acquire the 20th, 21st and 28th floors at 22 Bishopsgate, EC2. It took an additional 75,280 sq ft, bringing its total occupation in the building to more than 200,000 sq ft. The data showed an “under offer” pipeline of 2.3 m sq ft. This is 64% ahead of the long-term average of 1.4 m sq ft, and Savills expects total year-end take-up to exceed the 2021  total (4.9m sq ft) to reach 5.5 m sq ft. If achieved, this would put it in line with the five-year long-term average of 5.9 m sq ft. Agency figures recorded that 70% of deals under offer are on recently developed or comprehensively refurbished space, or space included in the development pipeline. Owing to the ongoing “flight to quality” among occupiers, grade-A space accounts for 89% of all office lettings completed in the City so far this year. Stuart Lawson, City leasing director at Savills, said the “notably buoyant” office leasing performance in the City of London in September was “a clear indication that the very best offices in the very best of locations remain a priority for occupiers”. He added that this was “amplified by both a war for talent and a return to the office”. Lawson said: “With reports of a slowdown in the development pipeline, this competition looks likely to increase further as the availability of prime offices reduces. The sheer number of live requirements in the market and prime grade-A rents being at an all-time high (£84.56 per sq ft) is evidence to support this.” Since the start of Q3, the data recorded 12 activated searches looking at the City of London and central London for more than 50,000 sq ft, which total 1.24 m sq ft. Savills noted that currently there are 8.1 m sq ft of active requirements, compared with the long-term average of 6.6 m sq ft. Paul Bennet, director in Savills’ occupier services team in London, said: “Occupiers in the market are seeking amenity-rich buildings with excellent sustainability and wellness credentials. With businesses monitoring staff return-to-work numbers and adopting various working practices, in any relocation they are looking to earn their staff commutes by providing the best working environments.” To send feedback, e-mail chante.bohitige@eg.co.uk or tweet @bohitige or @EGPropertyNews See which agents are doing the most deals in the London submarkets with our On-Demand Rankings >> Photo © Pembroke