Despite lockdown measures, businesses are still committing to office spaces across Central London on a gradual basis. The largest deal of the quarter was Latham & Watkins 200,000 sq ft pre-let at 1 Leadenhall Street, EC3 on a 15 year lease when the building reaches completion in 2026. Largely boosted by this deal, bias for Grade A space continues into 2021 with newly built and refurbished space accounting for 45% of take-up across Central London, up from 35% in Q4 2020.
Following the trend last year, the Professional Services sector amounted the largest share of take-up across Central London at 37% up from 26% in Q4 2020. The Media Tech sector followed at 21%. Other notable deals include Tik Tok signing the entire building (88,500 sq ft) at Kaleidoscope, 4 Lindsey Street, EC1 and the leasing of 46,260 sq ft at Juxon House to The International Dispute Resolution Centre (IDRC). BNPPRE acted on behalf of the tenant.
Tenant return space continues to enter the market fuelling an increase in supply levels. In Q1 2021 supply across Central London stood at 18.7m sq ft, equating to a vacancy rate of 8.3%. This is up 278 bps on the same period last year at 5.6%, and well above the long term average (6.1%). Tenant return space in Central London rose to 7.0m sq ft up from 6.2m sq ft in Q4 2020. Looking ahead, only a limited number of new developments are due to complete in 2021, and from the 3.1 million sq ft set to be delivered this year, 44% is already pre-let.