Take-up of Central London Offices Rebounds

There has been a substantial rise in the number of leases signed for central London office space, with CBRE revealing take-up increased by 96 per cent in May, compared to the previous month...

There has been a substantial rise in the number of leases signed for central London office space, with CBRE revealing take-up increased by 96 per cent in May, compared to the previous month. Dan Roberts, executive director at the company, explained this jump is a reason to be upbeat about the capital's future. "Whilst take-up levels are still below their long-term average, we are starting to see an increased level of activity from occupiers that will be driven by upcoming lease events and existing active demand," he asserted. In addition, space under offer stood at 2.37 million sq ft last month, putting it well above the long-term average of 1.93 million sq ft.

According to CBRE's research, the Midtown area saw the biggest increase in take-up, climbing by 231 per cent month-on-month in May. A BNP Paribas Real Estate report looking at the performance of the London office market in the first quarter of this year identified the Telecommunications, Media and Technology (TMT) sector as the driving force behind premises being secured in Midtown. In the three months from January to March, the organisation noted TMT firms accounted for 37 per cent of all leasing deals in the district. The CBRE study also highlighted demand from TMT companies, revealing they were responsible for two of the three largest deals finalised in May.

Meanwhile, the area with the largest volume of office transactions last month was the City, where deals for a total of 371,600 sq ft were signed. This could signal the start of a turnaround for the district, after BNP Paribas Real Estate reported take-up of City office space dropped by 18 per cent in the first quarter of this year, compared with the same period in 2011. Once again, the TMT sector was the most active with 28 per cent of deals for such companies, although the property and construction industry was not far behind, accounting for 21 per cent of take-up at the start of this year.

- Friday 15 June 2012

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