16 April 2012
Central London office market statistics for Q1 2012
Take-up of office space in the central London market fell slightly in comparison to the last three months of 2011, falling from 2.86 million sq ft in Q4 to 2.28 million sq ft in Q1, according to figures released BNP Paribas Real Estate, the leading international property adviser.
In the West End, Midtown and Docklands markets, take-up remained around the five-year average but the City market, which saw a fall from 1.13 million sq ft in Q4 to 0.87 million sq ft in Q1, remains below its five-year average of 1.31 million sq ft per quarter.
The lack of new and existing property coming to the market also meant that the supply of office space in Central London continued to dwindle, falling from 15.19 million sq ft during Q4 to 14.43 million sq ft during the first three months of the year.
“It remains a story of two markets,” says Dan Bayley, managing director of Central London for BNP Paribas Real Estate.
“The City market continues to suffer along with the financial sector and this lack of activity in the Square Mile means that transaction terms continue to be in favour of the occupier. In the West End however, there is an imbalance between demand from occupiers and supply of new and top quality accommodation. While rents remained stable, this ongoing shortage of supply of Grade A space has seen terms hardening and the upward pressure on rents in the West End is set to continue.”
“Take up, particularly from the TMT, property and construction and service sectors, has remained relatively strong across the capital,” he adds.
At £3.35 bn the total volume of investment transactions in the City, West End, Midtown and Docklands rose over the first three months of the year compared to £1.984 bn in Q4 2011. The biggest rise in the volume of investment transactions was in the City, which totalled £1.45 bn (rising from £1.01 bn in Q4). At the same time, investment transactions in Docklands rose from £0.012 bn in Q4 to £0.45 bn in the first quarter.
Prime rents and yields across London remained at the same levels as Q4 2011.
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