Office pre-lets at a high in Central London

But quarterly take up still significantly down in Q3

Article posted: 31 Oct 2011

New research from Colliers International has shown that the availability of Grade A office space in Central London remained flat in Q3, and despite pre-letting activity at its highest level for some time, quarterly take-up is still significantly down.

Central London office availability overall has remained flat at 7.7%, the first time quarterly vacancy has ceased to fall since Q3 2009. New and refurbished space rose slightly by 5%, driven mainly by the completion of office space in the City of London at Cannon Place. However, the City vacancy rate remains unchanged at 9.5%, suggesting continued steady absorption of space.

Despite this, a shortage of new supply still remains a concern. Focusing in on office space in the West End, new and refurbished accommodation actually declined slightly by 3% and is now down by 33% in past 12 months. Availability of office space in Mayfair, W1 has taken a dramatic fall by 43% in the past 12 months.

Mike MacKeith, Head of Central London Offices at Colliers International commented: “The market has seen a significant increase in pre-letting activity, which is at its highest for 12 months since the UBS deal at Broadgate. Prior to that, we have to go back to Q3 2007 to see a higher level.”

Anticipated development completions for the remainder of 2011 across all of Central London are expected to total 292,000 sq ft, bringing annual completions to 1.6m sq ft, compared to a 10 year average of 5.4m sq ft.

The Colliers International research also revealed that in the City market 65% of space completing in 2011 still remains vacant, compared to the West End market, where 75% of space completed in 2011 to date is either let or under offer.

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Posted by Jules