Central London office vacancy rates fall

Strong take-up across central London has brought office vacancy rates down across the board and close to the 10-year average. Analysis by agent Avison Young found vacancy rates fell to 6.9% at the end of the last quarter, a 0.2 percentage point fall on the previous quarter and edging closer to the 10-year average of 5.9%. The West End saw a marked fall in vacancy rates to 3.1% – the submarket’s lowest since 2020 – as take-up came in at over 1.1m sq ft, 87% above the 10-year quarterly average. This strong performance can be attributed to the submarket’s first mega-deals over 100,000 sq ft since Q2 of 2022 – 220,000 sq ft for BDO at 334-348 Oxford Street, W1, and 132,000 sq ft for Evercore at 105 Victoria Street, SW1. The City similarly saw strong take-up that came in 15% over the 10-year average, pushing vacancy rates down by the largest quarter-to-quarter drop since Q3 of 2023, from 10.4% to 7.2%. Bridging the gap between the two, London’s Midtown submarket saw take-up of 254,000 sq ft, 52% above the 10-year average, bringing vacancy rates down to 5% from 6.3% in the previous quarter. Dominic Amey, principal and managing director for London markets at Avison Young, said: “Falling vacancy rates and take up across London being substantially above 10-year average speaks volumes about the ongoing strength and attractiveness of London as a global business destination, and surely lays to rest any further debate about the future of offices. “It’s clear to see that businesses want and value office space. We believe that Q4 will be an equally active quarter, resulting in a very positive year-end take-up figure.” See London lettings >> Photo © City of London Corporation