Tim Hardwicke, SHW’s Partner and Head of Agency, comments: “Although the office market has slowed, there have been numerous lettings under 5,000 sq ft in all locations, which are not recorded in these Focus Report statistics.
“With Brighton telling a different story, take up is currently at 56,000 sq ft for the first half of 2024, compared with an overall take up of 87,000 sq ft in 2023. And in Croydon, there are a number of transactions bubbling away which have not yet reached completion. We expect the end of the year will show a significant increase in take up across the board.”
Most of the take up has been linked to Grade A / ‘best in class’ space due to occupiers’ quest to improve the quality of their offices, in order to give staff the best working environments they can afford. Relocations have been mainly driven by lease events and many occupiers are currently ‘considering their next move’, waiting to see what the government will bring.
Office attendance has returned to 3 to 4 days per week, and in many cases back to pre-pandemic levels. Occupiers adopting these levels as a minimum are seeing an increase in productivity and staff wellbeing. As such, ESG continues to be a serious consideration for both landlords and tenants who are willing to pay higher rents for quality, but also want to benefit from the lower running costs a modern, ‘green building’ will offer.
In London, Grade A rents are topping £85.00 (per sq ft) in Fitzrovia, £100.00 in Soho, £85.00 in Covent Garden and £59 in Midtown. Incentives on a 10-year lease term are averaging 24 months’ rent free.
Rental levels across the South East markets remain fairly level, with Brighton and Hove recording a jump from £38 per sq ft in 2023 to £41 per sq ft so far this year.
