These factors alone made everyone reflect on both London’s macro position as a global office destination and also on the very nature of how we occupy office space.
Three decades ago, corporates were having to sign 25-year leases to get the space they wanted. Today, they can source offices through flexible providers for 25 months, 25 weeks or even 25 days.
So now that we’re all just about back at our desks, what are the prognostications for the London office market this year?
Well, in terms of the feared impact of a Brexit exodus, it’s good news that Deutsche Bank, Bank of America, Citi and the European Bank of Reconstruction and Development are expected to recommit to London this year by signing up for new HQs. London office take-up surged in 2017 to exceed the 10-year average and pre-letting activity rose to reach 2.8m sq ft – an 87% increase year-on-year.
And from a space supply perspective because the development tap has never been fully turned on since the recession then there are actually locations across London where supply of space is very tight and rents are remaining relatively firm whereas they might have otherwise drifted downwards.
The capital’s key office markets enjoyed a buoyant 2017 from an occupier perspective but that was largely due to the demand from co-working operators who, of course, immediately release space onto the market one they have ‘occupied’ it.
There was also no shortage of demand on the investment front as the flow of overseas capital was augmented by concerted buying from Asia-Pacific investors.
So, altogether 2017 was probably a ‘glass half-full’ year for the London office market but there will be many twists and turns on the way to a Brexit and it remains to be seen what the long-term effect of the new wave of flexible office space providers will be.