Take-up

Q1 2022 take-up, totalling 95,500 sq ft, was in line with the five-year Q1 average for the market. Q1 take-up was made up of 26 transactions, the largest of which were the 16,000 sq ft acquisition by Shoosmiths and 15,000 sq ft acquisition by Dentons at Haymarket Square. Savills was involved in both of these deals.

Grade A lettings, totalling 55,000 sq ft, accounted for 57% of overall take-up in Q1 2022, which was 8% higher than the pre-Covid Q1 2019 Grade A take-up proportion of 49%.

Supply

Total existing supply (excluding pipeline) at the end of Q1 stood at 486,000 sq ft. Of this total, approximately 335,789 sq ft was Grade A, albeit much of this is dated and out of keeping with modern office requirements. Of total availability, Savills considers only 136,000 sq ft of this to be prime.

On this basis, the prime vacancy rate stands at 1.4% and total Grade A availability at 3.7%.

Take-up by business sector

The Professional sector was the most active in Q1 2022, accounting for 39% of overall take-up. This is a particularly strong start to the year for the sector given that it only recorded 9% of overall take-up in 2021.

Elsewhere, the TMT sector was the second most active sector in Q1 2022, recording 20,000 sq ft of take-up which equated to 21% of the overall total. This total was made up of two 10,000 sq ft Grade A lettings to Trustpilot and IFS UK.

Rents

There was no increase in the prime rent in Q1 2022 which currently stands in excess of £38.00 per square foot. That being said, the prime rent did grow by 7% in 2021 and has increased by 13% since 2016. Average Grade A rents have also grown significantly since 2016. In Q1 2022 the average Grade A rent was £32.50 per square foot, which was 10% above the pre-pandemic 2019 Grade A average of £29.50 per square foot.

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