However, leasing activity was up 10% on the previous quarter, and has seen the highest quarterly take-up so far this year. Take up for the year to date stands at 6.1m sq ft, down 21% on the long term average.

Savills research also shows that active demand in central London stands at 12.6m sq ft at the end of Q3, up 41% on the long-term average, and space under offer at the end of Q3 stood at 3.9m sq ft, up 35% on the five-year average.

 At the end of Q3 Central London supply stood at 22.8m sq ft, which equates to a vacancy rate of 8.7%, up 10 bps on the previous quarter, and in terms of the development pipeline, Savills research shows that year-to-date development completions reached 4.57m sq ft. Overall development completions from now until the end of 2027 are expected to reach 29m sq ft. 16% of this has already been pre-let.

Jonathan Gardiner, head of Central London office leasing, Savills, says: “Without wanting to put an overly  optimistic slant to what is still a challenging market, our Q3 numbers show positive signs of market pick up, with leasing activity and space under offer both up. We’re also continuing to see that more occupiers are seeking to increase their space needs (44%) than reduce (18%), a fact which is rarely commented upon in the ‘Future of the Office’  narrative. In terms of going into the final quarter and next year, the development pipeline is strong, however, 51% of the space scheduled for delivery between now and 2027 is yet to start, and with construction and financing costs showing little signs of abating we anticipate this will result in further delays and delivery challenges for schemes that are not yet underway.”

Preference to better quality office space remains, according to Savills, with Grade A take-up accounting for 90% of activity. The insurance & financial sector has continued to be the main driver of leasing activity so far this year, accounting for 26% of space acquired (by sq ft). The next largest sector was the Professional Services sector with a 12% share of take-up, followed by the Tech & Media sector with 11%.

The largest transaction to complete during Q3 was ICE Futures 127,000 sq ft acquisition of the 2nd to 4th floors at the Sancroft, EC1 on terms which remain confidential at present.