Covid-19 has resulted in more and more people working from home. This means that our city centres which are normally heaving with throngs of workers, are now resembling ghost towns in parts.
The result of this is that an increasing amount of office space is now available on the market with less companies committing to new commercial leases and more organisations closing down offices. Indeed city firm Deloittes have reported that it will close 4 of its city centre offices.
On average there is usually around 14 million square foot of commercial office space available at any one time in London. At the moment, we have 20 million of square footage available in the commercial sector in London and this number is rising.
The result of this is that commercial rents are falling and may need to decrease further. The mark down by valuers is only less than 1% currently, but this is expected to fall much further.