The demand for office space in the City remains robust. Under offers increased in February by 3%, remaining significantly above the 10 year average, taking this to the highest proportion of under offers, totalling at 38%. According to CBRE, the world’s leading real estate advisors, this represents a year on year increase of an impressive 76%. Across central London in February, 48 units with more than 20,000 square foot were under offer, of which 15 units were over 50,000 square feet.
London Office Take-up Total
Head of City Leasing at CBRE, Chris Vydra, expressed “The level of under offers in the City reached 1.4m sq. ft in February, accounting for 38% of the Central London office take-up total. We are seeing strong demand from a wide variety of occupier types spread across a diverse range of locations right across Central London. This should support leasing activity as we head into Spring.”
The largest transaction in February saw banking corporation, SMBC, obtain a 161,200 square foot unit at Broadgate, Liverpool Street, representing 37% of the buildings office space. Following the SMBC deal, the banking and finance sector, accounts for the largest proportion of occupancy in February at 40%. Prior to this, the business services sector accounted for 33% of central London’s office take-up.
Under Offers in May
May also saw a continue in the demand for London office space, as take-up increased by 74%. This meant that the year-to-date total of office take-up was 15% higher than at the same point last year. This increase in occupancy rate boomed due to an owner-occupier transaction, made by the Chinese Embassy at Royal Mint Court, for a 520,000 square feet unit.
Under offers also increased by 9% in May, taking the total to 46% above the 10-year average. An unnamed US tech company obtained an under offer property at 11-21 Canal Reach, King’s Cross, where there is talk they will pre-let the entire 404,600 square foot space. There were also 47 units across central London with more than 20,000 square foot under offer at the end of May, 17 of which over 50,000 square foot.
At the end of May, the public sector represented the highest proportion of office take-up at 45%, following the Chinese Embassy deal. CBRE’s Head of City Leasing also stated “May has been an active month for office take-up, driven by the Chinese Embassy transaction. With under offers being at a three year high, the prospects for the second half of this year are encouraging as occupiers from across a wide range of sectors continue to commit to London.”
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