By the end of the third quarter of this year, office take-up in London’s Midtown was 1m ft² higher than in the corresponding period in 2016. Total office take-up at end of the third quarter had reached 2.4m ft² in comparison to the 1.4m ft² which was let in the first nine months of last year.
Farebrother Leasing & Development Partner, Jules Hind, comments: “We expected there to be a demand bounce-back following the political shocks of last year, but the rate of take-up in Q3 was also 24% above the 10-year quarterly average so the market is clearly being driven by more than just the decision-making that was on hold last year. Most significantly, we continue to see a succession of new types of business coming into Midtown as illustrated by lettings to this year to Saatchi, Spotify, Verizon and Framestore.”
The latest Farebrother Midtown Market Update shows that total Q3 take-up was 820,690 ft². Notable deals included Spotify moving into The Adelphi (104,133 ft²); Verizon and Atos taking space at MidCity Place (88,558 ft² & 42,580 ft² respectively) while Metro Bank and Withers both committed to 20 Old Bailey (65,012 & 57,491 ft² respectively).
The total availability of space was down 14% from Q2 and the prevailing vacancy rate fell to 4.1% from 4.9%.
It was also a substantially more active quarter for the investment market, €1,1bn (£984.9m) of deals were transacted (Q2:€185.2m (£164m)) which was well above the 10-year average of €686.7m (£608m).
Farebrother’s Head of Investment, Alastair Hilton, commented: “After an abnormally quiet second quarter of the year, Q3 activity was largely driven by three transactions: the sale of Lacon London, Aldwych House, and 100 New Oxford Street which together accounted for nearly 75% of volume. All three were to overseas purchasers and this underlines their continued dominance. In the round, overseas investors accounted for 86% of total turnover during the quarter."
As the identity of Midtown’s occupier base changes so does the mix of for retail and leisure across the location. At present, there is a notable proliferation of bars which provide opportunities for ‘competitive socialising’.
Farebrother Head of Retail, Neil Davies, comments: “The growing trend for ‘competitive socialising’ - where you eat, drink and usually play some sort of game - is spawning new attractions across Midtown which are offering activities such as darts, table tennis and even axe throwing”.
At the other end of the spectrum, Midtown is also attracting a growing number of health and wellness-orientated operators. Recent new entrants to the area include Urban Fitness and Urban Fitness which are both opening facilities on Chancery Lane.