London office take-up bounces 6% above 10 year average
Take-up of office space in Central London increased by 30% to 3.3m sq ft in Q2 2017, 6% above the 10-year average, according to figures released by global real estate advisor CBRE.
The two largest lettings of the quarter were deals to co-working provider WeWork: a 283,500 sq ft pre-let at 2 Southbank Place and a 141,200 sq ft letting at 125 Shaftesbury Avenue. There were a further six deals of over 50,000 sq ft in Q2, one of which was over 100,000 sq ft (115,700 sq ft at London Fruit & Wool Exchange to NEX Group).
Take-up saw quarter-on-quarter increases in all Central London markets. Take-up was above-trend in the City, West End and Southbank and below trend in Midtown and Docklands. Driven by the WeWork deals, the business services sector represented the largest proportion of take-up in Q2 at 36%, followed by creative industries (29%) and banking and finance (17%).
Under offers increased for the second quarter in a row, rising by 9% in Q2 to stand at 3.5m sq ft,15% above the average of 2.8m sq ft. The largest under offer in Central London was at 21 Moorfields (549,800 sq ft). There were quarterly increases in the West End (+32%), Midtown (+32%) and Southbank (35%), but falls in the City (-13%) and Docklands (-26%). Under offers were above their respective 10-year averages in all Central London markets other than Docklands. The largest proportion of under offers are located in the West End, which is at a record high level of 1.4m sq ft.
Active demand in Central London was 6.2m sq ft at the end of Q2 2017 up from the 5.7m sq ft seen at the end of Q1.