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04 January 2012 - United Kingdom

London office market Q4 statistics

Take-up in the London office market fell in the fourth quarter of 2011.

1.8 million sqft of office space was let in Q4 in the core London markets (West End, Midtown, City and Docklands), a fall of 750,000 sqftcompared to the take-up for Q3.  The City market remained subdued with take-up of less than one million sqft, below the quarterly five year average of 1.3 million sq ft.  The figures for Q4 were substantially down on the same period in 2010 which saw office transactions totalling 4.18 million sq ft.

 Despite the lack of market activity, prime rents across the capital remained stable having increased steadily over the past twelve months due to the shortage of top quality accommodation.  

 

This is typified in the West End where the market, in terms of transactions, has been weak throughout 2011 but rents have increased during the year due tothe lack of supply causing increasing competition for Grade A space.  The recently announced pre-let by Great Portland Estates of over 60,000 sqft at 33 Margaret Street to Savills illustrates the underlying strength of the West End market.

 

Dan Bayley, Central London managing director at BNP Paribas Real Estate, says: “The shortage of Grade A office accommodation in the West Endis an ongoing issue and has caused some occupiers to migrate away to areas that they might not previously have considered. 

“The lack of activity within certain sectors is also noticeable.  If you look at the 25 largest deals in the City during Q4, only one transaction involved a pure financial business and there was not a single deal involving a lawyer.

In contrast there was strong demand from the TMT sector, accountantsand serviced office providers.  The share of take-up in central London by the TMT sector has increased from 11% in 2010 to 16% in 2011.  The pre-letting of close to 200,000 sqft at the Leadenhall Building to Aon was also a sign of confidence in the continuing importance of London to international occupiers.”

CENTRAL LONDON SUMMARY STATS Q4 2011

 

 

 

 

 

 

 

 

 

 

TAKE-UP (M SQ FT)

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

5 year avg

West End

0.71

0.74

0.7

0.67

0.5

0.75

City

1.87

1.05

0.87

1.20

0.95

1.3

Midtown

0.31

0.40

0.36

0.31

0.23

0.26

Docklands

1.29

0.02

0.04

0.37

0.124

0.27

Overall central London

4.18

2.21

1.97

2.55

1.8

2.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRIME RENT (£/SQ FT)

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

 

West End

90.00

92.50

100.00

100.00

100

 

City

53.50

54.50

54.50

54.50

54.50

 

Midtown

50.00

50.00

50.00

52.50

52.50

 

Docklands

36.50

36.50

37.50

37.50

37.50

 

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