The take-up of office space in Central London has increased by over a quarter, according to a property market review.
Findings by CB Richard Ellis (CBRE), a commercial real estate advisor, reveal that the market for office space in the City is at its strongest performance of 2011 so far.
The report shows that take-up of central London office space has improved by 26% in the third quarter of the year, making the total rise to 2.7million sq. ft.
Almost all of London markets and areas have recorded a surge in take-up, improving from 744,000 sq. ft. in the second quarter to 900,000 sq. ft. in the third quarter. The only exception was West End office space which fell by one million sq. ft. for the first time since the third quarter of 2009- due to a drop in newly-completed space.
Regardless of the overall increase and better third quarter performance though, Central London’s take-up remains below the 10-year average of 2.9million sq. ft. CBRE claims this is due to the lack of demand from the banking and finance sector.
Adam Hetherington, CBRE Central London Managing Director, said: “While take-up has been generally weak throughout the year, the jump in leasing levels across almost all central London markets over the third quarter has been a positive sign.
“However, it’s clear that the London office market has not escaped the deterioration in economic conditions and the lack of confidence amongst businesses has meant that occupiers are more cautious about making real estate decisions.”
The amount of space under offer remains high at 1.1million sq. ft. and similarly to last quarter, prime rents were unchanged across all the Central London markets with City and West End prime rents staying at £55.00 per sq. f.t and £92.50 per sq. ft.
The research warns that 2011 is on course to be one of the lowest on record for development completions, with only 1.7million sq. ft. scheduled.