Central London office take-up in the first quarter of 2019 reached 2.9 million ft², 21% lower than for the same quarter last year, according to the latest research from global property advisor Knight Frank. The TMT sector remained the dominant sector accounting for 26% of all office space take-up.
The Central London market is experiencing a supply squeeze as occupiers respond to expansion-led requirements and pursue preferred options. This has resulted in a rush to secure pre-lets as supply remains particularly tight, with pre-lets responsible for 24% of first quarter take-up. There are 4 million ft² of office space presently under offer and there are only 14.37 million ft² of space available in the entire Central London office market.
William Beardmore-Gray, Head of Central London, Knight Frank, said: “Despite the Brexit haze, the London leasing market remains resilient. Whilst there remains subdued sentiment across the market, overall office take-up in the first quarter was only 4% below the long-term first quarter average. Furthermore, with nearly four million ft² of office space under offer across London, we are facing a supply squeeze.”
Faisal Durrani, Associate, London Research, Knight Frank said: “The bottom line is that the supply pipeline remains restricted, driving occupiers to continue to secure space before it starts to impact their operational strategies. In 2018, 52% of deals over 20,000ft² contained an element of expansion. The tightness of the market is reflected in the upward creep in space under offer, which has risen to 970,000ft², from 832,000ft² in Q4 2018.”
