Rent-free incentive periods in the London office market spiked in Q2 2020 and rents showed just a small drop on Q1 of 1%, according to EG’s panel of agency experts.
This rise in incentives follows a traditional pattern and mirrors that seen immediately after the EU referendum vote four years ago.
Q3 2016 was the start of seven consecutive quarterly periods in which rent-free periods were perpetually extended, and only in the final one of those – Q1 2018 – did the panel once again supply data which indicated quarter-on-quarter rental upticks across London.
However, not only is the immediate rental drop greater than that seen in Q3 2016 (0.9% vs 0.4%), it is also more widespread.
Four years ago, eight of the 11 submarket areas featured in the survey saw a rental drop and three saw marginal rental growth against the previous quarter; this time, none of the areas saw any growth compared with Q1 2020, with 10 out of 11 showing a fall in rental tone.
For the full review of how the London office market fared in Q2 2020, make sure to pick up your copy of EG next week or log in to www.egi.co.uk/news on Thursday 6 August.