London office market stabilizes post-Brexit

The London office sector is still recovering in the wake of the U.K. referendum to exit the European Union, according to Colliers International, which forecasts post-Brexit uncertainty will continue to influence market dynamics. Colliers suggests, while demand is stable, occupiers will remain cautious, slowing deal activity.

Investment volumes fell 30 percent in the third quarter from the previous quarter’s level to £2.4 billion ($2.9 billion). Transactions in London were largely boosted by major deals involving the U.K. headquarters buildings of Apple Inc and Wells Fargo in Battersea and the City, respectively.

In addition, the office vacancy rate in London has risen. The anticipated release of secondhand space and protracted deal negotiation timelines mean absorption of office space has slowed. The prospect of increased re-gearing leases and landlords seeking to retain tenants during the continuing period of uncertainty are affecting stock and oc