Central London office space renting activity up 36%
The scale of office space rental deals agreed during the third quarter of this year in Central London were up by 36 per cent as compared with the previous three-month period, according to the latest figures on the subject from BNP Paribas Real Estate.
Central London is of course home to some of the most sought after office space and real estate in the world, with the City a particularly enviable office location for all manner of businesses.
Overall take up of offices across Central London accounted for 4.84 million sq ft of space in Q3 2014, BNP Paribas latest figures indicate. The quarter was apparently the sixth in succession to top the 10-year average of 3.04 million sq ft of office space being taken.
In a continuation of recent trends in central areas of London, technology, media and telecoms (TMT) businesses were among those doing the most significant deals to take up office space. The single largest deal done in the third quarter of this year saw the American ecommerce giant Amazon secure two lettings in the City that related to a total of more than 500,000 sq ft of space.
According to BNP Paribas’ latest report, supply of quality office space across central London fell by 10 per cent in the most recent quarter and vacancy rates are now said to be at their lowest recorded levels since 2008. Perhaps unsurprisingly therefore, average rents in prime locations are expected to continue on an upward trend heading into 2015.
In reference specifically to the Square Mile and London’s foremost banking and finance district, BNP Paribas’ report said: “Take-up in the City soared to 2.71 m sq ft, the highest since Q3 2000. The year to date volume of 5.54 m sq ft is just short of the 2013 total of 5.81 m sq ft.
“The ever increasing demand from TMT occupiers coupled with the large Amazon deals pushed the TMT sector’s share of take-up beyond 30 per cent for the quarter.”
According to the report, prime rents in the Midtown and Docklands districts of the city remained broadly flat, despite a number of relatively large-scale occupancy deals being done in these areas during the quarter.
Meanwhile, in the West End, demand spiked sharply in and around Victoria, with the area accounting for eight out of 10 of the largest office space occupancy deals agreed across London in Q3 2014.
Of the West End market in the period, BNP Paribas said: “In terms of occupier mix, the 3rd quarter represents one of the most diverse recorded in recent history. The TMT sector contributed the most with 19 per cent of total take-up but was followed closely by the banking and finance, corporate, public and service sectors which all recorded over 10 per cent.”
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