Office take-up in London has increased primarily due to an increase in demand for pre-letting of space according to the latest available figures.
London office take-up was recorded at 12.2m square metres in 2017, beating the annual average of 11.6m square metres. This growth was led by higher take-up of pre-let offices which grew by 87% compared to the previous year. There was significant activity in the final quarter of the year, especially around Central London. Office take-up increased by 81% in the City and 95% in the West End when compared with Q4 in 2016.
This increase in office take-up is partly due to the increase in office space available in London. Net absorption which measures the space occupied at the end of a given period minus the amount which was available at the start of the given period was -0.2m square ft in the West End and -0.1m square ft in the City. In addition, office vacancy rates stand at 5.6% which is the highest quarterly rate in the past four years.
The amount of London office space available was at 12.2m square ft in 2017 this is an increase of 3.7m square feet compared to the same period in 2016. Despite this increase in supply, there are worries that there will soon be a shortage of office space due to the number of major developments which have stalled or been cancelled. Indeed, although 9.8m square feet of office space will be completed in London over the next two years, over 60% of office space being completed in 2018 has already been pre-let. This has prompted concerns from many analysts that occupiers who will be looking for new office space over the next few years may struggle due to lack of availability.
Our Head of Commercial Leasing Elliot Simmons had the following to say: “We have seen great demand for office space in the West End as occupiers continue to flood into this dynamic place to work. Following a busy 2017 and a spate of completions in January, we anticipate another successful year.”
To see more details about the offices we have available to let, please take a look at our dedicated commercial lettings page or visit us in our Fitzrovia offices.
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