Just over 301,000 sq
ft was leased by occupiers in the first eight weeks of Q2 according to DeVono
Cresa, marking a drop of 88% on the level recorded for the same period in 2019,
as businesses put their planned office moves on hold in the wake of disruption
from the Covid-19 pandemic.
“The
closure of offices and the fast-paced adjustment to remote working meant that a
significant number of active requirements were paused,” said Shaun Dawson,
DeVono Cresa’s head of insights.
One such
requirement was the Daily Mail’s hunt for 120,000 sq ft to 150,000 sq ft of
space. Property Week understands
its search has been paused while it re-evaluates how much space it needs. One
source estimated the requirement could be slashed by up to 50%.
But
despite the widescale inertia, a number of big-ticket deals remain active in
the capital.
Law firms
still make up a large chunk of the demand in the capital’s office market. Two
such requirements – White & Case and Hogan Lovells – are understood to be
still looking for spaces of up to 200,000 sq ft and 300,000 sq ft respectively
before their leases expire in the mid-2020s.
Netflix
has also been searching for office space, around 100,000 sq ft, and IT services
group TransferWise is understood to be looking for more than 70,000sq ft
of space.
One City
agent told Property Week:
“I would imagine take-up next quarter would be not dissimilar to this quarter.
There’ll be a degree of delay and reticence, it won’t immediately bounce back,
but we are hoping Q1 next year things might start to come back as there are
lots of potential occupiers still looking around.”