The Flight-to-Quality in Office Real Estate: Evidence from London

Francisco Nobre, Jalal Siddiki and Toby Booker

No dvtpr_v2, SocArXiv from Center for Open Science

Abstract: We examine how the performance of higher-quality offices in London evolved following the Covid-19 pandemic, relative to lower-quality stock. Using submarket-year data from CoStar spanning 2003–2025, together with the CoStar Building Rating System, we implement a difference-in-differences framework comparing 4- and 5-star office properties to 3-star properties before and after 2020. We find that higher-quality offices experienced significantly higher asking rents but also higher vacancy rates, alongside a marked contraction in transaction activity. Disaggregating our treatment group by individual star rating shows that rents rose and vacancy fell for 5-star properties specifically, while the increase in vacancy was concentrated among 4-star properties. We document a parallel geographic divergence, with the transaction-market contraction concentrated in Central London & Docklands and the rise in vacancy more pronounced in Outer London. Our results indicate that the pandemic did not benefit high-quality office stock uniformly, but instead accelerated a more selective reallocation of demand toward the very best assets in the most central locations.

Date: 2026-10-22
References: Add references at CitEc
Citations:

Downloads: (external link)
https://osf.io/download/6ada37223f224e0e707d5508/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:dvtpr_v2

DOI: 10.31235/osf.io/dvtpr_v2

Access Statistics for this paper

More papers in SocArXiv from Center for Open Science
Bibliographic data for series maintained by OSF ().