Exclusive: Sub-let workspace market shrinking in win for office culture
The rate at which occupiers are seeking to dispose of their office space is showing strong evidence of decline, in a win for office culture.
At the end of January 2021, almost 500,000 square feet of sub-let space was made available, according to global real estate advisor CBRE.
Since then, the amount of space becoming available to sublet has been on a downwards trajectory with just 40,000 square feet added in May – 77 per cent less than the same period in 2020.
CBRE said the trend suggests that the rate at which tenants are putting their space onto the market has slowed considerably.
In addition, sub-let space is being increasingly withdrawn from the market. More than 500,000 square feet of sub-let space has been withdrawn so far in 2021, more than half of which was withdrawn in the last two months.
Provisional figures for June suggest that the trend is continuing, with less than 100,000 square feet of sub-let space placed on the market during the month and around 250,000 square feet withdrawn.
Rob Madden, head of CBRE’s London office brokerage team, said: “It is notable that withdrawals are now outpacing new additions to sub-let availability by a rate of more than 2:1.”
However, availability office space in Central London has been on an upwards trajectory since the beginning of the pandemic.
At the end of 2019 availability was 12.6 million square feet and by the end of 2020 total availability had increased 85 per cent to 23.1 million square feet.
This has continued into the first half of 2021, with supply the highest on record since 2004 at the end of May, standing at 26.4m square feet.