2023-02-09-莱坊-The_London_Report_Executive_Summary_2页_198kb

Executive Summary of London Office Report

The Knight Frank London Report examines the future of London's office market, focusing on amenity-rich buildings and quality versus quantity in occupier demands. Key findings include the rising importance of amenity provision scores, which are computed and show high scores in submarkets such as Covent Garden, Soho, City Core, Fitzrovia, and Midtown. This relates to an expected under-supply of new and refurbished office buildings (about 23.5 million square feet expiring or needed between now and 2027), increasing obsolescence risk and potentially raising yield spreads back to prime levels.

The investment landscape is impacted by higher risk aversion due to rising interest rates, leading to a forecast of £9.5 billion in transactions in 2023, slightly below the long-term trend. Private investors are poised to play a key role as global capital shifts toward lower-risk properties. Occupier demand is shaped by factors such as lease expiries (23.5m sq ft for spaces over 20,000 sq ft by 2027), a preference for redesigning offices with greater amenities, and the "Martini Syndrome" where offices remain primary for work but flexibility is increasingly accepted, avoiding full remote work outcomes.

This report underscores competition for capital, with London offices facing under-supply issues, particularly in average quality buildings that struggle with rental growth. Overall, the market is driven by quality improvements and amenity provisions to attract tenants in a slowing economic environment, with risks mitigated through strategic investment from private sources.