January 12, 2015
The amount of available office space in Central London has fallen by almost half since 2009, new figures reveal. The latest end of year research by Deloitte Real Estate show that the availability of office space has fallen 14 per cent over the last 12 months, and warned that rents will probably rise by around six to over eight per cent as a result. In an analysis of the submarkets across the West End, Deloitte reports that Victoria has seen the greatest decline in available office space, falling 46 per cent in just 12 months. While the City of London market has not seen as dramatic a decline in available space, hovering around five million sq ft throughout 2014, it still remains at its lowest level for seven years. This is despite over 3 million sq ft of new office space completing construction during 2014 – a new high.
Chris Lewis, head of tenant representation at Deloitte Real Estate, says: “All of the core Central London markets have seen a decline in available space in 2014. In fact the West End’s vacancy rate is now critically low at just below four per cent.”
Lewis continues: “We expect strong occupational demand to remain during 2015 with a limited development pipeline. We anticipate 6.3 per cent rental growth in the City and 8.7 per cent in the West End over the next 12 months on prime Grade A buildings.
“In some areas where we are seeing very low levels of available space, we could see pockets of super-growth.”