Availability in the Central London office market is at its lowest level for six and a half years, according to data released by CBRE, the global property consultant.

According to CBRE’s Central London Office MarketView, Q3 2014 office availability (including space that will become ready-to-occupy within 12 months) fell to 12.2 million sq ft, a 28% fall on the same point last year. Central London office availability has been trending downwards for a sustained period of time, seeing quarterly decreases in each of the last five quarters. Availability is significantly lower now than at the same point 12 months ago in all Central London markets.

Relative to trend, availability in the City is the lowest in Central London, being 27% below the 10-year average at 5.0 million sq ft. Availability in the West End is also at a cyclical low-point of 3.7 million sq ft, 26% below trend.

The supply of ready-to-occupy space in Central London fell to 8.3 million sq ft in Q3 2014, a 400,000 sq ft fall in the space of one quarter. At the same point in 2013, ready-to-occupy availability was 11.5 million sq ft.

The decrease in ready-to-occupy availability caused the Central London vacancy rate to fall to 3.7%, significantly lower than the 5.2% observed in Q3 2013. Vacancy rates in certain West End submarkets fell to extremely low levels in Q3 2014, being below 2% in Soho (1.8%), St James’s (1.8%) and Victoria (1%).

It is likely that availability of ready-to-occupy space in Central London will continue falling for the remainder of the year into 2015. From 2016 onwards, CBRE calculate that the development response will cause supply to increase, but will remain be below the 10-year average throughout the five-year forecast period. There is a total of 18.9 million sq ft of speculative development space due for completion in Central London, over 50% of which is located in the City.

Phillip Howells, Executive Director, CBRE said: “An increase in occupier activity coupled with a limited development pipeline has led to a supply crunch. The low levels of vacancy have fed through to the market in terms of rental growth, with all Central London markets seeing increases in prime rent of varying degrees in 2014. With availability set to fall further throughout this year and into 2015, prime rent levels are expected to grow strongly in the medium-term.”