London office leasing
deals are hanging in the balance as ‘zombie occupiers’ rethink their
space requirements in light of Covid-19.
sources have warned that the number of ‘zombie occupiers’ – tenants with space
surplus to requirement – has risen dramatically during the crisis.
aware of a number of deals that have been put on hold,” said Guy Grantham,
director of research and forecasting at Colliers International.
occupiers are in limbo at the moment. They’ve either got lease events – reviews
or expiries – coming up, or that have just happened, and are holding over the
space with the landlord’s consent.”
example is performance booking platform Live Nation, which is deliberating
whether to keep the 63,000 sq ft it took at the newly refurbished Farmiloe
Building in Farringdon.
business signed for the space in 2018, doubling its office footprint in the
capital, but is now questioning the move given the hit the live music industry
has taken during the pandemic.
said the market will not see the full impact of zombie occupiers on leasing
activity “until October, when the government turns off all the packages they’ve
put in place to help businesses – unless of course they extend them.
point, we’ll find out how hard some of these sectors and individual companies
have been hit. For now, a lot of them are being allowed to tread water
while they decide whether they take up leases.”
senior agent told Property
Week that it was “very difficult” to know how big office
requirements would be until people returned to the workplace.
moment, there’s hardly anyone in an office so whether people are in work,
furloughed or out of work, the fact is those office buildings are not really
being used,” they said.