Record breaking month for City of London office leasing market

The City of London leasing market has had one of the highest monthly take ups on record in May, with a total of 793,400 sq ft being let – up by 117 per cent month-on-month and 135 per cent on May last year. This brings the year to date take-up to 2.2 million sq ft, a 46 per cent increase on the equivalent period in 2012 according to Jones Lang LaSalle.  Five lettings over 50,000 sq ft were recorded during May, of which three were pre-lets exceeding 100,000 sq ft. These include Amazon at Sixty London, EC1 (213,000 sq ft), Bird & Bird at 12-14 New Fetter Lane which was leased last month by Great Portland Estates (pictured), EC4 (136,200 sq ft), and Amlin at The Leadenhall Building, EC3 (111,800 sq ft).

Dan Burn, Director of Office Agency at Jones Lang LaSalle said: “Despite a number of large deals completing this month, there remains a very healthy level of activity, with almost 1.4 million sq ft currently under offer and active demand currently registered at 6.6 million sq ft.

“The combination of strong levels of current activity and the low level of speculative development is forcing occupiers to bring their future requirements to the boardroom agenda. This is especially prevalent for those occupiers with lease events in 2015- 2018, as concern rises over the long term availability of suitable product.”

Notable deals in the pipeline include CMS Cameron McKenna at Canon Place, EC4 (140,200 sq ft), FFW at Riverbank House, EC4 (80,000 sq ft) and key new potential City requirements launched since April include M&G (250 -300,000 sq ft), TFL  (150,000 – 200,000 sq ft), News International (400,000 sq ft ) and Rabobank (100,000 sq ft).

Burn continued: “We anticipate upward pressure on prime rents which currently stand at £57.00 per sq ft, following a rise of 3.6 per cent in 2012. A combination of eroding levels of current supply, strong demand for product being delivered in 2014, of which nearly 60 per cent is now let, and pre-let activity continuing, will strengthen landlords stances and put further pressure on prime rents in the City.”