Central London office market slows substantially

Take-up subdued according to CBRE’s Monthly Overview

Article posted: 04 Sep 2011

According to CBRE’s August Central London Offices Monthly Overview, the market for office space in Central London has slowed substantially since the start of the year which was reflected in July’s take-up which fell across all markets to reach just 658,000 sq ft.

Only four deals over 20,000 sq ft were transacted in July –31% below the long-term trend. While deals for newly completed space rose sharply, a fall of nearly 45% in second hand take-up drove overall transactions down. Activity was focused largely in the City and office space in the West End where take-up totalled 310,800 sq ft and 227,200 sq ft respectively. Reflecting this, take-up of office space in both the City of London and West End were marginally lower on a 6-month rolling average basis.

After 6 successive months of falling availability, supply ticked up marginally in July to reach 13.9m sq ft. This rise was largely attributed to an increase in new space under construction (18% higher). As a result, the overall availability rate rose to 6.3%. Supply was higher in all markets, but more noticeably in the City where it rose to 5.9m sq ft and in the West End where it rose to 4.2m sq ft.

Digby Flower, Head of Central London Agency said: “Take-up was very subdued during July as occupiers continued to reflect current economic conditions and remained cautious about committing to significant amount of space.”

The largest deal in July saw Expedia move from the West End to the City where they acquired 81,300 sq ft at The Angel Building. Facebook took 36,400 sq ft of Expedia’s evacated space in the West End at Seven Dials Warehouse, WC2. Elsewhere, there was 120,400 sq ft of take-up of office space in Midtown, Southbank and Docklands combined.

For breaking news relating to office space in London follow us on http://twitter.com/officespacenews

Posted by Sara