According to a report from CoStar News, prepared by CBRE, the availability of commercial property in Central London continued a long term fall during April to 13.76m sq ft, the lowest level since June 2008. This caused the availability of offices in central London to fall to 6.2 per cent, significantly below the 10-year average of 7.6 per cent, the agent said. Demand remains strong according to the report with the volume of office space under offer in central London up by over 65 per cent since the end of last year to reach the highest level for 13 and a half years. Under offers are currently at 4.73m sq ft, their highest point since September 2000, when under offers stood at an all-time high of 5.92m sq ft. The report claims that there are a total of seven buildings across central London with more than 100,000 sq ft currently under offer, including 10 Fenchurch Avenue (above). More information here.

London will be home to 35 new large office buildings before the end of this year making it one of Europe’s most important destinations for major corporates wishing to occupy over 5,000 sq. m. of commercial property, according to a new report from Colliers International. The survey of 23 major European cities found that together they will offer just over 800 readily-available and high quality large scale offices to choose from by the end of 2014. The 2014 EMEA Office Report claims that this year will see London become the city with the joint third highest availability of large offices in Europe, up dramatically from 11^th place.  London matches Amsterdam in having 60, trailing Paris with 62 and Moscow with 98. London, however, stands out as having a strong pipeline of new large office developments.

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A new report from commercial property specialists Lambert Smith Hampton claims that demand for office space in the UK this year is set to hit its highest level since 2000. The firm claims in its annual Office Market Review that the take-up of office space could reach 30 million sq. ft in 2014, continuing the momentum from the remarkable 33 percent upswing in demand last year. However, the report also notes that, following the introduction of the Government’s new permitted development legislation in 2013, the number of notifications for conversions of office buildings to residential use jumped 500 percent in the first six months. The trend will act as a further constraint on supply and push up rents as businesses seek additional space for expansion or moves to new property at the end of leases although it will also remove obsolete office space in many less desirable business locations.

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Edinburgh is one city enjoying a resurgence in investment

The distinctions between the commercial property market in London and those in the rest of the UK are becoming increasingly evident, based on new data from DTZ. While the value of transactions hit a record breaking £44.7 billion last year, up nearly a third on the figures for 2012, the majority of investments into regional markets were made by domestic firms while those in London were dominated by overseas investors. Around £23 billion of the overall total was invested in property outside of the capital, a reversal of last year when more money was invested in the capital than outside it. Meanwhile foreign investors spent a total of £20bn throughout the year with the majority (£14.2 bn) invested in Central London. According to DTZ, one notable trend in the year was for UK investors to divest property in London and shift investment to other areas of the UK.

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The construction industry has had its best month for almost six-and-a-half years; including the largest increase in commercial activity since August 2007. Although the upturn was led by house building, which increased for the twelfth successive month; surging growth was also recorded for commercial construction and civil engineering, due to increased spending by business on infrastructure, office space, industrial units and retail outlets. The Markit/CIPS Construction PMI™ rose from 62.1 in December to 64.6, its highest since August 2007 – one of the strongest growth rates seen since survey data were first collected in 1997. The index shows that while house building has been rising for a full year, commercial building and civil engineering only started recovering in earnest last summer. However, growth of both has now accelerated sharply. More →

Last year marked a six year high in commercial property investment across the UK according to a new report from property information providers CoStar, driven by increases in regional markets and a sharp upturn of interest in Central London from overseas investors. A total of £52.7 billion of transactions was completed across the UK in 2013, albeit that two-thirds of investments were made in London and the South East of England. It was also a year for record breaking deals, notably the Broadgate office development in the City (above) and More London on the South Bank, each of which were valued at £1.7 billion. London was particularly attractive for Asian investors who CoStar claim see it as a safe haven and invested £9.2bn, up 80.6 percent on 2012.

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Edinburgh is one region enjoying a resurgence in confidence

The UK commercial property market is continuing its strong recovery, driven in large part by a resurgence in regional markets and financed by more adventurous borrowing by investors, a juxtaposition of three new reports reveals. According to Lloyds Bank’s twice yearly Commercial Property Confidence Monitor, around three quarters of the small and medium sized commercial property agents surveyed for the report expect a  surge in activity over the next six months, led by especially strong confidence levels in Scotland, South West England, North West England and the Midlands. The results are mirrored in the latest Savills’ commercial development activity survey which found that  the UK’s commercial sector grew at its fastest rate on record during November. Meanwhile, another report from Laxfield Capital claims that investors are willing to take on more debt for new deals to take advantage of the new confidence in the market.

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