London office market recovery gathers pace due to space shortage

A YEAR on from its nadir, London's office market recovery is gathering steam as a lack of new development and a rebound in demand for space begins to chip away at a vacancy rate that peaked at its highest this century.

- BLOOMBERG

Prices were up 6% at the end of June from a year earlier, according to an index of transactions compiled by real estate data provider CoStar Group.

The recovery began in the second half of last year as vacancy rates finally topped out at almost 11% after more than four years of virtually uninterrupted increases since the onset of the pandemic, CoStar’s data show.

“Office prices are continuing to appreciate amid improved investor sentiment toward the sector and strengthening occupier demand,’ said Mark Stansfield, senior director of market analytics at CoStar.