City drives office demand

Metropolis Office Requirements – First Half of 2013

The Metropolis team researched 3,252 UK relocation, refurbishment and construction leads in the first half of 2013. 852 of the total leads researched were active searches by businesses for new office space, representing over 20m sq ft of demand.

In terms of private sector office demand by region, the significant proportion originated unsurprisingly from central London companies, particularly those in the City of London. Metropolis researched in excess of 150 City of London office requirements in the first half of 2013, representing over 4m sq ft of demand.  Almost 2m sq ft of demand was uncovered in the West End and over 1m sq ft in Mid Town.

Thames Valley requirements counted for over half of the private sector office demand researched in the South East (1.5m sq ft). Several new Thames Valley requirements emerged from the TMT sector (Technology, Media, Telecoms) and there were also significant new requirements from biotechnology, pharmaceutical and  insurance companies.

The North West region is showing further signs of increasing activity, with the majority of office requirements centered on Greater Manchester (61%). Some of the larger office searches in this area have come from law firms, accountants and banks.


The TMT sector made up 21% of the total UK office demand uncovered by Metropolis research (4.2m sq ft). The banking & finance and law sectors continue to produce strong demand for office space and this demand is expected to grow if recent reports on the bounce-back of the services industry are to be believed.

We have also seen strong interest in new office space from the insurance sector. Three of the top five requirements by size from this sector are centered on the City of London, with one insurer looking for over 100,000 sq ft in Glasgow as well as in London EC2.

Four of the top five office requirements in the accountancy sector are for space in London. However there are also several firms in this sector with requirements for over 30,000 sq ft in Manchester, Leeds, Bristol, Reading and Edinburgh.

Looking forward, we expect to see a similar sector picture in the second half of 2013, with a number of new requirements for high quality space  likely to emerge due to improving economic conditions. The London office market looks well positioned to satisfy much of this demand, with grade A lettings predicted by many to return to the peaks last seen in 2009-2010.

Notable London occupiers currently considering options include Omnicom (300,000 sq ft), M&G Investments (250,000 sq ft) and DLA Piper (200,000 sq ft).


(C) Metropolis Property Research Ltd 2013

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