Central London office leasing deals plummeted during the third quarter as businesses put decisions on hold while people worked from home, but viewings are starting to pick up, according to new research.
Property agent JLL said just 0.9 million square feet of Central London space was signed for in the three months to September 30.
That was down from 1.1 million square feet in the prior quarter, and well below the 3.4 million square feet recorded in the third quarter of 2019.
The fall in deals came as companies assessed whether to commit to new offices and put decisions on hold. Scores of people have been working remotely since the Covid-19 lockdown started.
However, firms such as Netflix have recently agreed leases, in a boost to the market during a turbulent period.
Dan Burn, head of City leasing at JLL added that his firm understands there is more than 2 million square feet of demand from the legal sector for offices to occupy in future years.
He added: “The last few weeks have signalled more positive signs. We have seen increased attendance in the workplace and more viewings being undertaken as future office space moves back to the top of the agenda for many corporates.”
Chris Valentine, JLL’s head of West End leasing at JLL, said: “It is evident that despite some knee-jerk reactions in the early days of the pandemic, businesses now understand the need to provide a high quality physical environment for their staff that can foster creativity and productivity as well as supporting social and mental health needs.”
The firm predicts an increase in levels of activity in the final three months of 2020, which it expects to translate into increased transaction levels in the first quarter of 2021.
The research came on the same day that landlord Derwent London said it has received 83% of office rents due on the September quarter day. That is ahead of the collections for the July and March quarters.
Derwent London has completed £1.9 million of new lettings since June.
