FIGURES | CENTRAL LONDON OFFICES | May 2022

Strong leasing demand led by the market’s

largest deal since 2018
1.3m sq ft 24.6m sq ft 4.5m sq ft 8.5% £0.2bn
SQ FT Take-up SQ FT Availability SQ FT Under Offers Vacancy Rate Investment

Arrows indicate change from previous quarter

FIGURE 1: Central London 4-Quarter Rolling Take-up vs Availability

– May saw the strongest monthly take-up in the year-to-date, following 1.3m sq ft of transactions during 16 30
the month, exceeding the 10-year monthly average of 1.0m sq ft 14
25
– Under offers fell as a result of strong take-up, but remained well above the long-term average, standing 12
at 4.5m sq ft 20
10

Million sq ft

Million sq ft
– Supply fell slightly (-1%) during the month to 24.6m sq ft, the lowest level this year. A high proportion 8 15
of the total availability (71%) was for secondhand space
6
10
– 2022 has seen 896,300 sq ft of new development and refurbishment space complete thus far. The
4
largest development scheme to complete was Duo, 280 Bishopsgate, EC2 totalling 253,900 sq ft 5
2
– There is 12.9m sq ft under construction in Central London, of which 8.6m sq ft is space available to let.
Of the total space under construction, 4.5m sq ft (35%) is due to complete this year 0 0

Feb-20
May-17

Nov-18

May-21
Nov-17
Aug-17

Feb-18

Aug-18

Feb-19

Aug-19

Feb-21
Nov-19

Feb-22
Aug-20

Aug-21
Nov-20

Nov-21
May-18

May-19

May-22
May-20
– Despite a month-on-month decrease, investment volumes totalled £6.7bn in the year-to-date;
representing the strongest volumes for the January-May period since 2017
Take-up Availability

Source: CBRE Research, May 2022

1 CBRE RESEARCH © 2022 CBRE, INC.

 FIGURES | CENTRAL LONDON OFFICES | MAY 2022

Take-Up Under Offers

May represented the highest monthly total for take-up since the year began, with occupiers transacting Under offers remained well above average levels (+32%), standing at 4.5m sq ft following a 12% monthly
on 1.3m sq ft of space during the month. Compared to April take-up was up 88%, to exceed the market’s decrease, likely due to the completion of large transactions completing in May. Despite the fall, 596,700
10-year monthly average take-up of 1.0m sq ft. In the year-to-date take-up totalled 4.7m sq ft; the highest sq ft was newly placed under offer during the month. Space under offer was above trend level across all
total seen during this period since 2019. five main markets with the exception of Midtown.
There were three transactions over 50,000 sq ft, including Kirkland & Ellis’s 414,300 sq ft space-take at 42% of the space under offer was for newly completed or pipeline space, to include the top seven units
40 Leadenhall Street, EC3 which represents the largest leasing deal in Central London since 2018. These with space under offer (alone totalling 916,800 sq ft), indicating continued demand for high quality space.
three deals alone accounted for more than half (52%) of the monthly total take-up, while 619,500 sq ft
There were 15 units across Central London which had more than 50,000 sq ft under offer at the end of
transacted across smaller deals.
May, of which the largest was Paddington Square, W2 which had 196,500 sq ft under offer to Capital
Driven by the Kirkland & Ellis deal, the professional sector accounted for 42% of the monthly take-up. International, in advance of its completion expected later this quarter.
This follows a number of large deals to law firms in the last 12 months however the creative industries
have remained the dominant sector taking 2.4m sq ft in the last year.
Take-up in May was driven by pre-let deals (which exceeded its trend level), led by the top four
FIGURE 2: Central London key deals
transactions which all saw occupiers take space in advance of its completion. Take-up of newly
completed and pre-let space accounted for two thirds of the monthly total, while secondhand take-up Occupier Sq ft Market Address
remained below its long-term average (-28%) for the second consecutive month. Kirkland & Ellis 414,300 City 40 Leadenhall Street, EC3
Merck Sharpe & Co. 195,100 Midtown Belgrove House, WC1
Availability Holman Fenwick Willan 59,700 City 8 Bishopsgate, EC2
Central London office availability totalled 24.6m sq ft in May following a slight decrease (-1%) Source: CBRE Research, May 2022
month-on-month. It remained above the 10-year monthly average of 15.8m sq ft but was at its lowest level
since December 2021.
FIGURE 3: Central London key under offers
Secondhand availability continues to represent a large proportion of the market supply (71%) and
remained well above its long-term average despite a slight decrease to 17.3m sq ft at the month-end. Occupier Sq ft Market Address
Supply of newly completed and new early marketed space (supply that is not yet ready to occupy but will Capital International 196,500 West End Paddington Square, W2
become so within 12 months) also fell slightly but remained above their respective trend levels. At the Various 128,500 City 22 Bishopsgate, EC2
end of May, there were 27 units across Central London with more than 100,000 sq ft of ready-to-occupy
Reed Smith 119,900 City Blossom Yard and Studios, E1
space available.
The Central London vacancy rate remained largely stable at 8.5%, relative to 9.5% in May last year. Source: CBRE Research, May 2022

2 CBRE RESEARCH © 2022 CBRE, INC.

 FIGURES | CENTRAL LONDON OFFICES | MAY 2022

FIGURE 4: Central London Take-up FIGURE 6: Central London Under Offer

1.8 6
1.6 5
1.4
4
1.2

Million sq ft
Million sq ft

1.0 3
0.8 2
0.6
0.4 1
0.2 0
0.0

May-21

May-22
Aug-20

Aug-21

Feb-22
Jun-20

Oct-20

Feb-21
Nov-20
Dec-20

Mar-21

Jun-21

Oct-21
Nov-21

Mar-22
Dec-21
May-20

Sep-20

Jan-21

Sep-21

Jan-22
Jul-20

Apr-21

Jul-21

Apr-22
Nov-21
Jul-20

Jul-21
Nov-20
Mar-20

May-20

Mar-22
Sep-20

Mar-21

May-21
Jan-21

Sep-21

Jan-22

May-22
Under Offer 10-year Average
Secondhand New Completed Pre-Let 10-year average
Source: CBRE Research, May 2022
Source: CBRE Research, May 2022

FIGURE 7: Central London development pipeline

FIGURE 5: Central London Availability
12
30
10
25
8

Million sq ft
20
6
Million sq ft

15
4
10
2
5
0

2020
2021
2022
2010
2011
2012
1996
1997

2001
2002

2006

2008
1998
1999

2023

2025
2024

2026
2000

2013

2015
2014

2016
2017

2019
2003

2005

2018
2004

2007

2009
0
Mar-20

May-20

Mar-21

May-21

Mar-22

May-22
Jul-21

Sep-21
Jul-20

Jan-21
Nov-20
Sep-20

Nov-21

Jan-22

Completed U/C Let/Under Offer U/C Available

Secondhand New Completed Early Marketed 10-year average Source: CBRE Research, May 2022

Source: CBRE Research, May 2022

3 CBRE RESEARCH © 2022 CBRE, INC.

 FIGURES | CENTRAL LONDON OFFICES | MAY 2022

Investment
FIGURE 10: Key Central London Investment Transactions
Investment in offices saw subdued activity following a strong start to the year, with volumes totalling
4,500 20000
£224m in May. Despite this, in the year-to-date investment totalled £6.7bn, more than three times the
4,000
£2.0bn which transacted in the same period of 2021.
3,500 15000
Eight deals in total transacted during the month, including four in Midtown which accounted for 64% of 3,000

£m
the total monthly volumes. The largest deal of the month was the purchase of 7-11 Herbrand Street, WC1 2,500
10000

£m
by a UK life science REIT for £85m. 2,000
1,500
Driven by this deal domestic investment drove the market activity in May, representing 67% of the 1,000 5000
monthly total. However in the last 12 months overseas buyers have purchased £10.4bn of stock 500
accounting for 73% of the market’s total investment. Key international players have been North American 0 0

Nov-16

Nov-18

May-20
Aug-16

Feb-20

Aug-20
Aug-18

Feb-21

Aug-21

Feb-22
Nov-20

Nov-21
Feb-17

Aug-17

Feb-18

Feb-19

Aug-19
Nov-17

Nov-19

May-21

May-22
May-16

May-17

May-19
May-18
and European purchasers, transacting on £4.0bn and £1.7bn respectively relative to £3.8bn from domestic
investment.
£m Rolling 12 month (RHS)
FIGURE 8: Central London key investment transactions
Source: CBRE Research, May 2022
Address Capital value (£m) Market Purchaser
7-11 Herbrand Street, WC1 £85 Midtown Life Science REIT FIGURE 11: Central London investment by purchaser, 12 months to May 2022
6-10 Andrew Street, EC4 £30 Midtown GPE

Source: CBRE Research, May 2022 0.5%

28.1% 27%

FIGURE 9: Central London investment transactions 3%

Rolling 12 months 01/06/21 - Rolling 12 months (percentage of
31/05/22 total)
May-22 Apr-22 Mar-22 Q1 2022 Q4 2021 12% 30%
UK Purchasers £3,840m 26% £151m £29m £435m £944m £1,555m

Overseas Purchasers £10,417m 71% £73m £740m £2,751m £4,556m £2,024m

Unknown £428m 3% £0m £58m £116m £122m £82m

UK Asia Europe Middle East North America Overseas Other
Total £14,684m - £224m £827m £3,302m £5,622m £3,661m Source: CBRE Research, May 2022

Source: CBRE Research, May 2022

4 CBRE RESEARCH © 2022 CBRE, INC.

FIGURES | CENTRAL LONDON OFFICES | MAY 2022

Market Area Overview Contacts

Rob Madden James Beckham Jennet Siebrits
Executive Director, Head of Managing Director, London Executive Director, Head of UK
London Investor Leasing and Investment Properties Research
Occupier Brokerage +44 207 182 8090 +44 207 182 2066
+44 20 7182 2492 +44 7710 888 051 +44 798 587 6831
+44 7879 443 706 James.Beckham@cbre.com Jen.Siebrits@cbre.com
Rob.Madden@cbre.com

Simon Brown Emily Bastable Oscar Miller

Senior Director, Head of UK Senior Analyst, UK Office Analyst, UK Office Research
Office Research Research +44 207 235 6024
+44 207 182 3993 +44 207 182 8321 Oscar.Miller@cbre.com
+44 7769 914 455 +44 7880 174 659
SimonD.Brown@cbre.com Emily.Bastable@cbre.com

© Copyright 2022. All rights reserved. This report has been prepared in good faith, based on CBRE’s current anecdotal and evidence based views of the commercial real estate market. Although CBRE believes its views reflect market conditions on the date of this presentation, they are
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