Q3 CENTRAL LONDON OFFICE TAKE-UP TOPS TEN YEAR QUARTERLY AVERAGE
- Q3 Office take-up in Central London increased by 11% from Q2
- Vacancy rate fell to 4% in Q3 2019
- Under offers rose by 5% to 4.4 million sq ft, far exceeding 10-year average of 3.1million sq ft
Central London office occupancy levels have remained robust in Q3 2019, with take-up and under-offers increasing and the vacancy rate falling.
Take-up in Central London increased 11% compared with Q2 2019, to 3.4 million sq ft; exceeding the ten-year quarterly average of 3.3 million sq ft. This represents a marginally higher take-up of space than during the same period last year (an increase of 0.3%). New and pre-let take up represents 45% of the quarterly total, reflecting occupier preference for new and high-quality space. Secondhand take-up totalled 1.9 million sq ft, as take-up of this type fell just below the 10-year average. The business services sector (which includes flexible office operators) represented 37% of take-up in Q3, followed by the banking and finance sector, accounting for 24% of total take-up.
The vacancy rate fell to 4% from the Q2 2019 rate of 4.1%, with availability falling by 3% in Q3. While availability of newly completed and new early marketed supply has fallen, secondhand space availability was above the ten-year average, at 91 million sq ft, rising by 1% during Q3 2019.
Under offers totalled 4.4 million sq ft at the close of Q3, a 5% increase on Q2. These were up significantly in the Docklands (+166%), City (+1%) and Midtown (+9%).
“Demand for space in Central London remains robust, with new, high-quality space proving especially popular. Extremely low levels of vacancy, coupled with a very limited development pipeline, have created conditions for rental growth, with almost all markets seeing an increase in rental values during the quarter.”