Key highlights include:
- Political uncertainty leading up to the December election acted as a drag on demand in Q4 2019, with annual take-up just failing to exceed 10-year average.
- Regardless, pre-letting activity surpassed 3 million sq ft, which is more than double the 10-year average.
- London-wide vacancy ended the year at 4.8%, which is below the level recorded at the end of 2018 (5.1%).
- Pipeline supply numbers grow more constrained due to exceptional pre-letting activity. 12 million sq ft now under construction across London but 7.5 million sq ft is either pre-let or under offer.
- Average headline rents in London saw uplift of 2% during 2019, and we would expect a similar level of movement in the first half of 2020, as submarkets respond to elevated demand
- Occupiers are beginning searches earlier and earlier, with some out shortlisting possible new HQs 3-4 years prior to lease expiry.
- There is scope for some improvement in investment volumes in H1 2020 with a number of overseas investors keen to enter the market once more.