DEMAND FOR LONDON OFFICES WEATHERS GATHERING ECONOMIC AND POLITICAL STORMS
Demand for office space in London remained robust through the traditionally quiet first quarter, according to CBRE, the world’s leading global real estate advisor. 3.1 million sq ft of the capital’s offices was snapped up by companies, despite fears that economic headwinds and the possibility of Brexit could dampen demand.
The 3.1 million sq ft is only marginally below the 10 year average of 3.2 million, with a major move by Thomson Reuters, to take 315,400 sq ft at 5 Canada Square in the Docklands, lifting overall take-up for the quarter. The amount of office space currently under offer remains unchanged from the previous quarter at 3 million sq ft, having been above the 10-year average of 2.8 million sq ft since the beginning of 2014.
The development response has so far tracked demand, with supply increasing by 2% over the course of the quarter to stand at 12.2 million sq ft, some 17% below the 10-year average.
Between a weak outlook for global economic growth and an upcoming vote on EU membership, businesses have had to contend with a heightened level of uncertainty. That demand for office space has remained so resilient speaks volumes for London’s ongoing attractiveness as a global hub for those companies hoping to lay down roots or expand their footprint in the capital.
“Whilst the high level of space under offer is particularly encouraging, we anticipate a more subdued Q2 as the referendum vote gets closer. We will be on course for a rebound in leasing activity in the second half of the year provided the UK votes to remain in the EU.