July 3, 2013
The London office market continues to thrive according to two new reports from property consultancies CBRE and BNP Paribas Real Estate. According to the CBRE survey, take-up of Central London office space in the second quarter of 2013 increased by 32 percent compared with the previous quarter while, according to BNP Paribas, the take up of central London offices in the first half of 2013 rose by nearly a quarter 24 percent to 6.02m sq ft compared with the same period in 2012, while activity rose by around a third (31 percent) to 3.08m sq ft in the second quarter of the year compared with the second quarter of 2012. CBRE report that there were three deals for offices over 100,000 sq ft in the period covered and eight deals over 50,000 sq ft, the highest number since Q4 2010.
According to CBRE, the three deals over 100,000 sq ft transacted over the course of the quarter were:
• 205,800 sq ft to Amazon at Sixty London, EC1
• 138,300 sq ft to Bird & Bird at 12/14 New Fetter Lane, EC4
• 111,800 sq ft to Amlin Insurance at The Leadenall Building, EC3
Total take-up in Central London reached 3.4 million sq ft, taking the year-to-date total to 5.9 million sq ft, significantly higher than the 4.7 million sq ft seen at the same point last year. Q2 2013 saw healthy levels of demand across a wide range of business sectors with similarly heightened levels of take-up from firms within the banking & finance (18%), business services (18%) and TMT sectors (19%).
Take-up in the City reached its highest level in almost three years at 1.6 million sq ft, comfortably above the 10-year average of 1.2 million sq ft. West End take-up increased by 41% when compared with the previous quarter, but year-to-date remains slightly behind the equivalent point last year. Prime headline West End rents (representative of Mayfair & St James’s) increased to £97.50 per sq ft over the course of the quarter.
Under offers in Central London reached three million sq ft for the first time since Q2 2011. Two units over 100,000 sq ft are currently under offer: 216,300 sq ft at Sea Containers House, SE1 and 140,300 sq ft at Cannon Place, EC4. There are an additional eight buildings over 50,000 sq ft under offer across Central London.
Meanwhile, BNP Paribas Real Estate claimed in its survey that office space take up in the City of London rose to 1.71m sq ft in the first quarter of this year, the highest level since the fourth quarter of 2010. In the Southbank, second quarter office take up rose by 40% to 0.21m sq ft compared with the first three months of 2013, while the West End market remained stable at 0.77m sq ft. In Midtown, the market dropped back to a steady level at 0.3m sq ft, following unusually high take up in the first quarter of the year as Google secured its new King’s Cross headquarters. The activity continues to drive rents upwards, with prime rents continue to rise in several markets. In Holborn rents have risen to £57.50 per sq ft, while in the Southbank and City they rose to £50 per sq ft.