Since the referendum vote two years ago, we are exposed to regular daily stories, outlining the negative effects that it will have on businesses and other aspects of our daily life, when the exit is final in 2019. However, despite the negative impacts, there has been surprising positive news.
The world’s leading real estate advisor, CBRE, has confirmed London’s office occupancy rate was up 7% in 2017. The boost came from large transactions made last year, where 17 transactions of over 100,000 square foot were finalised, with 7 of these transactions actioned in the final quarter. This is the highest annual total since 2001.
Office occupancy in central London in the final quarter of 2017, represented an increase of 10% on the previous quarter. Occupancy in each of the previous three quarters was above the average on the previous 10 years.
Emma Crawford, Managing Director of London Leasing at CBRE, commented “Against a difficult backdrop in 2017, London once again gritted its teeth and showed its continued resilience. This is reflected in our office leasing figures which show a year on year increase of 7 per cent. Whilst the serviced office sector accounted for a large proportion of leasing activity in Central London, as we finished the year the largest under offer of the quarter was in the banking sector, which despite initial fears is indicative of London maintaining its crown as Europe’s premier financial hub.”
The successful occupancy rate has continued into 2018, and market indicators remain positive with similar performance in the first quarter. This rate is expected to continue for the rest of 2018. Occupier take-up for central London office space has remained above average for the past six consecutive quarters. This was certainly inflated by the inclusion of Deutsche Bank’s pre-let of 550,000 square foot at Moorfields. This transaction definitely boosted figures, however, it should be noted that even without this pre-let, office take-up would have still exceeded average levels. Engineering giant WS Atkins, obtained 65,900 square feet of London office space at the Nova North building in Victoria, adding to the occupancy inflation.
Currently, occupiers are seeking over 9 million square feet of London office space, according to CBRE’s calculations, the demand deriving from upcoming lease expiries and business expansion.
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