Full-year central London office take-up rose in 2024 compared to 2023
The number of office take-up transactions rose 3% across the core central London markets – the West End and the City – in 2024, compared to the previous year, with the volume of office space taken rising 1% to 10.1 million sq ft, according to new data from Savills.
Q4 take-up across central London reached 3.17 million sq ft, up 16% on Q3 2024, says Savills, with office leasing for the year only 5% down on the long-term average. Over Q4 2024 the office vacancy rate decreased 70 basis points to 7.5% and supply at the year-end stood at 19.6 million sq ft as a result of a limited quantity of development completions expected in Q2 2025, and low levels of supply coming onto the market.
Active demand from occupiers for space in the same markets stood at 13.5 million sq ft, up 44% on the long-term average, at the start of Q4 2024 as central London continues to see high levels of demand, especially from the insurance and financial services sector. Savills says that demand data indicates that the majority (48%) of active occupiers are seeking to increase their space, compared to 21% seeking to decrease space.
Savills says that the City average grade A rent in 2024 was £70.51 per sq ft, a 2.8% increase on 2023, while prime City rents rose 7.5% to £98.60 per sq ft. In the West End, average grade A rents remained broadly stable at £94.87 per sq ft, and the average prime rent was £157.15 per sq ft.
Josh Lamb, director in Savills City office agency team, comments: “It’s great to start 2025 on the back of a strong year, with provisional 2024 stats for the City indicating take-up rose 22% up on our market’s five-year average at 6.54 million sq ft.
“With increased costs and fewer options available across both the City and the West End, we are confident that 2025 will see further rental growth on the very best offices, while some occupiers will have to compromise either on the quality of the office stock they are seeking or consider non-core locations.”
Hunter Booth, director in Savills West End office agency team, comments: “With take-up closing at 3.56 million sq ft in 2024, the West End market was marginally up on 2023, albeit slightly down on the five-year average, most likely stymied by occupiers’ caution in making final decisions about their space. We anticipate that many of the reasons which drove this hesitation will ease across 2025 and we will see increased impetus to move in a low-supply environment. This is born out by West End demand being 9% up on the 10-year average. In addition to this, 20% of West End development scheduled in 2025 is already pre-let with lower supply coming through in 2026/27, so occupiers will feel the pressure to transact on the space that remains available in this year’s pipeline. This should drive robust rental growth this year both for prime and grade A space.”
