Office take-up in Central London is on track to hit 11.9 million sq ft in 2016, according to real estate group JLL
The firm has said the surge in London office take-up continues “an exceptional run of leasing activity that began in early 2013”, making it three consecutive years above 11 million sq ft for the first time.
In February last year, we reported that London was named best city in the world for investing in major office refurbishment and the latest report from JLL reconfirms the increasing popularity of office space in Central London.
The report in summary:
- City leasing volumes have not matched the exceptionally high volumes transacted in 2013 and 2014, when take-up reached 7 million sq ft, but still reflect buoyant occupier demand.
- In 2015, leasing activity in the City was spread relatively evenly across business sectors – service industries (27%), professional (24%), banking and finance (22%) accounted for the largest shares.
- A strong final quarter in the West End indicates an annual take-up is on target for the highest annual total since 2007.
- Robust take-up drives strong rental growth. The strongest growth in 2015 came from the City where prime rents were up by 12%, now £70 per sq ft. In the West End core of Mayfair and St James, prime rents increased to £120 per sq ft, with even higher growth in surrounding areas – Soho, Covent Garden and Fitzrovia.
Neil Prime, Head of UK Office Agency at JLL, said: “It is striking that the City market has performed so well given a relatively modest share of activity from the financial sector. However, with banks and other financial occupiers now representing around 40% of active requirements, we expect to see them exert a stronger influence on the market in 2016.”
Ben Burston, Head of UK Office Research at JLL, added: “Three consecutive years of very high take-up is testament to the persistent strength of London’s economy, notwithstanding a subdued global economy in 2015.”
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