Increased take-up of office space in Central London

CBRE’s Central London Property Market Review Q3 reveals strongest quarterly performance to date this year

Article posted: 09 Nov 2011

Take up of office space in Central London rose to 2.7m sq ft in the third quarter of 2011 - the strongest performance of the year to date, according to the latest Central London property market review from CBRE.

Almost all Central London markets recorded increases in take-up from the previous quarter, with the largest increase seen for office space in the City of London, strengthening to 0.9m sq ft from 744,000 sq ft in Q2. The exception was office space in the West End, which fell below 1m sq ft for the first time since Q3 2009 due to a large drop in newly completed space.

In spite of the better Q3 performance, take-up remained below the 10-year average of 2.9m sq ft and has been below this average for the last three quarters. The lack of demand from the banking and finance sector has been the primary explanation of this; the sector’s share of total take-up was 18% in Q3 and 22% for the first three quarters, which compares with an average of 29% over the last 10 years and 41% last year.

The amount of space under offer remains encouragingly high at 1.1m sq ft despite falling over the quarter and is on par with the long-term average. With only 1.7m sq ft scheduled for completion, this year is on course to be one of the lowest on record for development completions.

 
Just as the last quarter, prime rents were unchanged across all the Central London markets with City and West End prime rents staying at £55.00 per sq ft and £92.50 per sq ft respectively.

Central London investment volumes were £1.4bn for the third quarter, 42% lower than the previous quarter; however, total investment for the first three quarters was £6.8bn which is £1bn ahead of the same period a year ago. The West End witnessed the two largest deals and four of the top ten, and at £0.8bn it accounted for 58% of all Central London investments.

A full copy of the report is available at : Central London Property Market Review - Q3

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Posted by Jo