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Office space in central London has seen take up increase largely in the second quarter of this year due to companies eagerness to grab office space before the expected shortage of supply kicks in.
The leasing activity of office space in central London has seen 2.3m sq ft acquired in Q2 of this year. This is up nine per cent compared to the previous quarter of this year, according to research published by the global property consultancy Cushman & Wakefield.
Surprisingly, the City office market was the leader in this take up, totalling a transaction of 1.8m sq ft of transactions, which is its highest transactional figure since the third quarter of 2007, the year before the financial collapse. Also surprisingly, the west end’s leasing figures were below the five year quarterly average with only 510,000 sq ft being let this second quarter. As said by Eugene O’Sullivan, director of Morgan Pryce “This sudden decrease in activity in the west end is due to high prices, high business rates and limited choice of supply which forces companies to look further east where there are better deals to be had.”
The leasing activity in central London has been supported by the major pre-letting campaigns for the tower buildings coming available in the City, which have been mostly leased to large insurance firms. Pre-letting has been so popular due to the expectation from companies that there is to be huge lack of supply in the years to come. This lack of supply has already seen the cost of rent shoot up and this pattern is expected to continue with even less supply available in the future and therefore higher rental costs and more competition for companies to secure the right space for themselves.
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.