London,
21
January
2019
|
11:37
Europe/London

2018 ends with a record 3.3m sq ft of London office space under offer

  • 2018 take-up exceeded both 2016 and 2017 levels
  •  26 deals to flexible office operators in Q4 totalled 755,900 sq ft
  •  Full-year take-up reached 13.7m sq ft

2018 ended the year with 3.3m sq ft of Central London office space under offer, the highest year end total in nearly two decades (since 1999), according to global real estate advisor CBRE.

The largest unit under offer at the end of Q4 was at 5 Bank Street in Canary Wharf where 419,500 sq ft was under offer. At the end of Q4, under offers were above-trend in Midtown and Docklands. There were 37 units with over 20,000 sq ft under offer across Central London at the end of Q4, six of which were for 100,000 sq ft or larger.

Take-up in Central London for Q4 2018 was 3.9m sq ft, a quarterly increase of 13% above the 10-year quarterly average of 3.2m sq ft. This took the full-year total to 13.7m sq ft, exceeding the levels seen in both 2016 (12.3m sq ft) and 2017 (13.4m sq ft). Take-up for 2018 was also comfortably above the 10-year annual average of 12.8m sq ft.

Three deals over 100,000 sq ft transacted over the course of the quarter, the largest of which saw WeWork sublease 159,200 sq ft from Marks & Spencer at 5 Merchant Square in Paddington. This will become WeWork’s third largest centre in London after Southbank Place and Moor Place.

A total of 26 deals to flexible office operators totalling 755,900 sq ft helped boost business services take-up to 31% of the Central London total. The creative industries sector also represented a notable proportion of take-up at 15%.

A total of 4.7m sq ft of development and refurbishment space completed in 2018. At the end of 2018, there was 13.7m sq ft under construction, 48% of which was available.

Prime rents increased in the City by £1.00psf to £69.50psf and in the Docklands by £0.50psf to £48.50psf. Prime rents remained unchanged in all other Central London markets.

Richard Smart, Executive Director, London Leasing
2018 ended with a bang, as centrally located London office space continued to be snapped up by occupiers. In a continuing trend, flexible office operators acquired large units across London, this included several new entrants to the London market. The large amount of space under offer at the end of last year will mean that 2019 is set for a buoyant start.
Richard Smart, Executive Director, London Leasing