Take up of office space in Central London at highest level in six years

Take-up of office space in Central London was almost 11m sq ft in 2013, way above the 2012 figure of 7.3m sq ft and an increase of more than 50 per cent year-on-year. According to the latest figures from Cushman & Wakefield, leasing activity to December increased across all Central London markets, with transaction volumes 22 per cent above the five-year average. It says that the number of transactions over 50,000 sq ft was a major driver of leasing volumes, with 30 deals signed during 2013 – the highest number since 2007. The Media and Technology sector saw most activity across Central London, accounting for 36 per cent of all letting volumes in 2013, up from 23 per cent in the preceding two years.  

The Media and Tech sector will continue to dominate the leasing market into 2014, although activity from the banking and financial services sector is expected to account for an increasing proportion of leasing volumes, especially in the City.

The firm reports that leasing activity in the City office market increased quarter-on-quarter and reached just under 2m sq ft in the last quarter of 2013 –  he highest quarterly volume since mid-2007. As a result, annual take-up reached 6.5m sq ft; a third higher than the five-year average.

There was a significant increase in the volume of pre-let deals during 2013, to just over 2m sq ft, and there were over 10 prelets signed for over 50,000 sq ft which was more than the previous three years combined.

Cushman & Wakefield’s head of City office agency, Andrew Parker, said: “The City office leasing market continues to go from strength-to-strength, which has been reflected in the number of occupiers committing to pre-lets, in anticipation of a shortage of space. In fact almost a third of all space let in the City this year has been pre-let. The imbalance between supply and demand for larger units will continue to characterise the market and we expect the number of pre-lets to increase further in 2014.”