Leasing across the Central London office market was down by 56% (6.5m sq ft) in 2020, compared to 2019.
Data from DeVono Cresa’s Central London Office Market report showed that the financial services sector accounted for 21% of total Central London office leasing in 2020, with a further 51% of activity being spread across legal, media, technology and corporate sectors.
Meanwhile the quality of space was key as 44% of space leased was either pre-let or grade-A space.
The average deal size in 2020 was 20% lower that the long-term average and available office space reached 18.5m sq ft by the end of 2020.
City availability is up by 45% – the highest level since 2013 – and is similar to the levels of availability seen during the global financial crisis in 2008.
Head of insight at DeVono Cresa, Shaun Dawson said: “Over the past 12 months, the office leasing market has moved from one favouring landlords, to one that now largely favours tenants. Knowing when the market will shift back, will, of course, impact future commercial real estate strategy decisions. There is currently a window of opportunity for tenants to benefit from shifts in the market. This could manifest as a rental reduction, improved availability of better-quality space, or better incentives for those renegotiating and renewing existing leases. Factors that we are dealing with today will influence choice and decisions for many years to come.”