Vacancy for office buildings is starting to rise across the wider London market, as the slowdown in deals execution begins to negatively impact absorption, according to Colliers International. London-wide vacancy is up to 6 percent in the third quarter, still below the long-term (20-year) average but at its highest level for seven years.
While overall actively marketed tenant space is still marginally below the 10-year average, Colliers anticipates further significant uplift following the wind down of government furloughing support as well as in the early part of 2021, as companies gain greater clarity on relocation strategies and new occupational densities.
Transaction levels will remain subdued for the remainder of 2020, with only relocations planned pre-COVID or forced movers likely to be in the market. Total London take-up for in the first three quarters of 2020 stands at 5.3 million square feet, which compares to a 2019 equivalent of 9.2 million square feet.
