Office lettings offer hope London won’t be a ‘ghost town’ for much longer

Some numbers further down GPE’s report show businesses are aware that new offices may be in short supply in coming years and there could be a battle for space. In central London, property agent CBRE estimates that 14 million square feet of new space is currently under construction, of which 44% is already pre-let.  

Whilst CBRE estimates that 32 million square feet of new speculative space could be delivered before the end of 2025, construction has yet to start on 75% of that space. In  GPE’s view, current levels of market uncertainty will likely result in schemes being delayed or alternative plans being pursued. As a result, the property developer is “continuing to see encouraging levels of pre-let interest in  near-term development schemes as larger occupiers look beyond Covid-19 to ensure they secure the best space for their business”.  

Meanwhile, Landsec’s chief executive Mark Allan said earlier this week that prior to the latest lockdown, office occupancy levels had been improving. In the third week of September, its offices were the most full the company had seen since the first lockdown.  

Companies that have recently inked office deals include Arrival, which last month said it would double the size of its west London HQ.

WFH has proved popular, and staff have proved they can work successfully remotely. But many employers think meetings and training are better in person, while working on a laptop at a kitchen table is not suitable for everyone.

Employers have signalled they will look to embrace flexible working post-pandemic, with a mix of home and office working.

Across the capital it has been a grim year for London office lettings. Do not expect an amazing bounce back soon, but the fact that a number of firms are committing to London offices should be cheered.

Office workers will be needed to support other West End and City businesses, including shops, restaurants and pubs as they try to recover from the virus crisis.

Earlier this week London-listed landlords made big gains after Pfizer’s boss Albert Bourla updated on a “first but critical step” in the firm’s work to “deliver a safe and effective vaccine”.  

A vaccine could ensure people feel safer returning to offices. That, coupled with the latest deals, offers hope that more life will return to the capital.