London office space is at a premium once more, a report reveals, as economic good health continues to return to the UK.
According to Knight Frank, take up of prime city of London office space by financial companies in 2010 hit 6.4 million square ft.
That compares to a figure of 4.5 million sq ft in 2007. Significantly, it also puts take up over the period ahead of pre-credit crunch levels. In 2006, for instance, when the chill winds had yet to hit, take up for the year was 5.3 million sq ft.
The company’s study also provides more evidence of the ongoing sea change in market conditions.
As demand has returned, the spate of projects that were abandoned during the worst of the recession is causing a supply shortfall, the property company surmises. In turn this has sent rents for office space soaring. These now stand at £55 per sq ft.
William Beardmore-Gray, head of City leasing at Knight Frank, told the Financial Times: “There are financial firms we talk to who want to acquire offices and expand in London, and need to act ahead of approaching lease expiries in 2014 and 2015; but in some cases the uncertainty surrounding regulation is clouding the matter.
“Once confidence returns, we will start to see more expansion-led demand coinciding with a shortage of supply.”
Knight Frank’s findings come as Drivers Jonas Deloitte earlier this month revealed that City office space rents rose by 25 per cent last year.