A recently released Summer 2022 Office Market Update by DeVono has revealed that 3.4m sq ft of office space was leased in Central London in Q2 2022, the highest level since Q4 2019 and 12% above the short-term quarterly average.

DeVono stated: ‘This flies in the face of the impending economic distress that lurks on the horizon, and with reduced business optimism in Q1, these factors could well impact leasing in the latter half 2022. The increase in the volume of space leased in Q2 has not translated into a rise in the number of businesses taking space.’

‘DeVono research shows that 406 deals were completed, a drop of 25% from Q1 to Q2. While this latest number may be the lowest quarterly number of deals since Q2 2021, it is still higher than the average number of deals for the previous three years by 11%.

‘The lower number of transactions in 2022 is softened by the fact that businesses have leased larger spaces. A return of the ‘mega deal’ has led to the average deal size in Q2 rising to 8,574 sq ft, a pronounced increase of 56% on the previous quarter. Therefore, the reduced number of deals is not representative of any drop in leasing activity.’

At the beginning of the year there was much industry hype over large space requirements, which were close to transacting, but only one 100k+ sq ft completed in Q1. However, in Q2 DeVono says that there has been a relative flurry of ‘mega deals’ with four deals agreed across the core markets of the West End, Midtown and the City, all of which totalled approximately 745,000 sq ft.