20250317-莱坊-The_London_Office_Market_Report_Q4_2024_16页_3mb

London Office Market Q4 2024 Summary

Overall Market Performance

• Leasing Activity: Total take-up reached 3.28m sq ft, up 9.0% from Q3 and 16.5% above the long-term quarterly average (2.85m sq ft). The City & Southbank regions drove 82% of the demand, while professional services contributed 38%.
• Vacancy Rates:
  • City Core: 0.6%, lowest in eight quarters.
  • West End: 7.0%, 7% points above the long-term average.
  • Docklands & Stratford: 14.6%, 2 points better than previous quarter.
• Prime Rents:
  • City Core: £95.00/ sq ft, up 5.6% from Q3.
  • West End Core: £160.00/ sq ft, up 6.7%.
  • Docklands: Stable at £57.50/ sq ft.

Key Trends by Region

• City Core:
  • Record leasing momentum with 2.10m sq ft taken up, exceeding long-term average by 33.9%.
  • Financial sector led demand (826,116 sq ft), with private capital accounting for £0.73bn in investment.
• West End:
  • Take-up reached 1.11m sq ft, 17% above the average, driven by professional services (30.7% share).
  • Shortage of prime space (0.3% vacancy), with speculative supply set to increase.
• Docklands & Stratford:
  • Take-up declined (annual average 0.3m sq ft, 57% below LTA), but vacancy improved to 14.6%.

Investment Highlights

• Q4 Investment: £3.9bn, down 25.4% from the long-term average but reflecting increased focus on larger deals (up 72.5% in transactions >£100m).
• National Investors: UK (49.1% market share) and European investors dominated, while North American activity rose significantly.
• Assets Under Offer: Increased to £1.0bn, but volumes fell by 45% due to fewer available spaces.

Supply Outlook

• New Construction: Pipeline reached 18.1m sq ft (2028 delivery), with a projected 5.1m sq ft undersupply of premium office space.
• Speculative Space: At 3.4m sq ft (growth 15.8%), primarily concentrated in City & Southbank.

Key Conclusions

• Resilience: Strong rental growth and demand driven by finance and professional services, despite geopolitical and economic headwinds.
• Supply Constraints: Record undersupply of best-quality space, with prime yields remaining stable.
• Investment Shift: Greater focus on value-added assets and mid-sized transactions, supported by improving fundamentals.

Data Summary

• Take-up: London wide hit 3.28m sq ft, 9% rise from Q3.
• Construction: Pipeline increased to 18.1m sq ft, with 5.1m sq ft projected shortage by 2028.
• Vacancy: Overall rate at 9.1%, slight decline.