According to Savills research, office take-up in Central London in the first half of 2017 has reached 5.5 million ft² (510,950 m²), marking a 23% increase on the same point last year (4.5 million ft²/ 430,500 m²) and the 10-year average (also 4.5 million ft²/ 430,500 m²).
Savills says take-up has increased in both London’s City and West End markets driven by ongoing strong demand from tech and media (24% market share in the City, 25% in West End), insurance and financial (13% market share in both the City and West End) and with strong take-up from serviced office operators (8% market share in the City, 27% in West End). In the City, take-up was also driven by the professional services sector which accounted for 16% of activity, according to the firm.
This increased activity sees 36% of the City’s development pipeline for 2017 – 2020 already pre-let, says the firm, and 29% for the West End market. Overall, at the end of H1 2017, 11.8 million ft² (1.09 million m²) of space remains available across Central London according to the research, equating to a vacancy rate of 4.8%. For comparison, Savills 10-year vacancy rate average currently stands at 5.8%.
Stuart Lawson, director in the City leasing team at Savills, comments: “The first half of 2017 has been notably strong as occupiers remain committed to Central London and acquire new office accommodation in order to support ongoing long term business. Whilst the events of the last year have made some occupiers pause for thought, the statistics indicate resilient take-up across all size sectors, which is promising. Looking ahead to the second half of 2017, accommodation currently under offer is also strong, standing at 2.9 million ft², which is also ahead of the long term average.”
