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Take-up in Central London in Q2 declines significantly

Central London take-up declined to just 1.1 million sq ft in Q2 2020, with the quarter coinciding with the peak of the UK’s COVID-19 lockdown restrictions. This represents a 56% decrease on the previous quarter and a 65% fall on the same period last year, according to the latest figures from CBRE.


Despite the impact of COVID-19, take-up activity triggered by lease expiries or breaks for space in excess of 50,000 sq ft continued to progress. The largest deal of the quarter saw BP pre-let 201,600 sq ft at Cargo, 25 North Colonnade, E14. The three largest deals transacted during the quarter (all over 50,000 sq ft) were pre-lets, suggesting a continuation of strong demand for best-in-class Grade-A office space. In addition to the BP lease, deals included 85,800 sq ft taken by Covington & Burling at 22 Bishopsgate and 65,900 sq ft taken by Roxor Gaming at Dormeuil House, Golden Square.

“With the start of Q3 coinciding with a relaxation of the lockdown restrictions and the UK Government now encouraging people to return to work if they can do so safely, we are hopeful for some recovery in Central London take-up during the next quarter. Take-up for Q3 is likely to see an increase from the severely depressed levels seen in the second quarter but is expected to remain low relative to past trends. We expect a return to more normal levels of market activity as we enter the final quarter of the year, as schools reopen in September and business settles into a ‘new normal’. We expect initial take-up in the next quarter to be dominated by Tech, Life Sciences, Professional Services and boutique Financial Services firms.

“The availability of new Grade-A space is likely to remain constrained due to development delays caused by the lockdown and continued demand for the best, most technologically advanced space. As the office remains vitally important in supporting employee collaboration and interaction, this demand may grow yet further,„ said Simon Brown, Director, UK Research.

“We expect demand for agility to drive flex space activity in the second half of the year. As occupiers reopen their offices and reshape their businesses, they will increasingly use flex space as a strategic and tactical lever. Space operated by flex providers, with its shorter commitments and reduced Capex, can play a significant role in supporting occupiers in managing a lower density environment and a greater variety of work settings", added Stewart Smith, Managing Director, CBRE Flex Advisory.