UK Is a Two-tier Market in Store for Central London Offices?

22 jun. 2021

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Key highlights:

-Prior to the pandemic, the occupier flight to quality in Central London had depleted the supply of new and under construction space

-Since the start of the pandemic take-up has been at record lows, however the proportion of pre-letting activity has remained high while the share of deals above prevailing prime rents has doubled

-Drivers of the flight to quality – wellness, amenity and increasingly sustainability – are expected to remain important

-Rental growth between the highest and lowest quality space has been diverging since 2008

-Our forecasts suggest that over the next five years, the best 25% of office space will see rent growth of 7% while the lowest 25% will fall

-CBRE's project management team have noted increased enquiries and activity in the repositioning of older assets