Central London office take-up in the first quarter of 2019 reached 2.9 million sq ft, 21 per cent lower than for the same quarter last year, according to the latest research from global property advisor Knight Frank. The TMT sector remained the dominant sector accounting for 26 per cent of all office space take-up.
The Central London market is experiencing a supply squeeze as occupiers respond to expansion-led requirements and pursue preferred options. This has resulted in a rush to secure pre-lets as supply remains particularly tight, with pre-lets responsible for 24 per cent of first quarter take-up. There is 4 million sq ft of office space presently under offer and there is only 14.37 million sq ft of space available in the entire Central London office market.
William Beardmore-Gray, Head of Central London, Knight Frank, said: “Despite the Brexit haze, the London leasing market remains resilient. Whilst there remains subdued sentiment across the market, overall office take-up in the first quarter was only four per cent below the long-term first quarter average. Furthermore, with nearly four million sq ft of office space under offer across London, we are facing a supply squeeze.”
Faisal Durrani, Associate, London Research, Knight Frank said: “The bottom line is that the supply pipeline remains restricted, driving occupiers to continue to secure space before it starts to impact their operational strategies. In 2018, 52 per cent of deals over 20,000 sq ft contained an element of expansion. The tightness of the market is reflected in the upward creep in space under offer, which has risen to 970,000 sq ft, from 832,000 sq ft in Q4 2018.”
Q1 saw 11 deals over 50,000 sq ft transact, the largest of which was Facebook taking 175,000 sq ft at Regent’s Place, 10 Brock Street.