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Recent research by BNP Paribas Real Estate has shown positive trends in relation to take-up of office space in London.
The increase in levels of activity noted were significant, amounting to 24% higher take-up in the first half of 2013 in comparison with the first half of 2012.
The amount of space in question in Central London – 1.71m square feet – is the highest since the last quarter of 2010, when 1.87m square feet was agreed.
In respect of specific areas of the capital, Midtown’s figures dropped in the second quarter of 2013 in comparison to the first, largely because the Google deal at King’s Cross constituted an exceptionally high take-up. The West End too remained static with 0.77m square feet taken. The Southbank, on the other hand, saw increases of 40% during the recent quarter as its office space deals rose to 0.21m square feet.
The report also looks at prime rents across London, which largely have shown an increase. In the Southbank and City fringe rents increased to £50 per square foot, and in Holborn they increased to £57.50 per square foot. It is anticipated that the static trends in the West End – indicating a steady lack of supply of prime office space, will result in even higher rents in Mayfair and St James.
Sally Brough, Associate Director at Morgan Pryce, notes, “It is interesting to see that the statistics are bearing out what we see on the ground. There is definitely an increase in many areas, both in terms of rental values and the amount of take-up – which leads to a lack of supply in some areas. This is all good news for London – though of course until more space is made available by the construction of new buildings, it could get more difficult for tenants looking for office space.”
The report also notes that the TMT sector is widening its boundaries, and that some financial institutions that have been less affected by the recent banking crises, such as mutual societies, are also becoming players in the City market.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.
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