Businesses are seeking high quality office space as they prepare to bring staff back to the workplace, with prime property deals rocketing over the last six months.
While many firms are contemplating a mix of office and home working after the pandemic, the race is on to offer employees top spec work space after Covid restrictions are lifted.
The government confirmed today that it will abandon the “work from home” advice in June, more than a year after many employers were forced to shift to remote-working at the beginning of the pandemic.
According to the latest research by CBRE, 25 deals across central London have been transacted at a rental level of or above £90 per sq ft, representing one fifth of all deals.
In comparison, in the six months before the pandemic, just six per cent of the market was transacting at more than £90 sq ft.
While transaction levels remain down on pre-pandemic levels, the first quarter of this year saw the highest amount of office take up – 1.3m sq ft – since Covid hit the UK.
Some of the biggest deals completed over the last six months include BP’s move into 25 North Colonnade in Canary Wharf, Latham & Watkins’ take up of 1 Leadenhall and JLL’s move into 1 Broadgate, both in the Square Mile.
CBRE said the move to high quality offices is also reflected in its prime rent figures, especially in the West End core markets of Mayfair and St James’s, where prime rents have jumped eight per cent quarter-on-quarter.
Richard Smart, London managing director at CBRE said: “Whilst take-up still remains low relative to trend, several distinct occupier themes are starting to become evident, most notably a flight to quality.
“This shows that office occupiers are willing to pay for the best available product in the market in order to execute their occupational strategies and win the war for talent.”