London occupier wheel turning..

A recent report by City of London office agent Ingleby Trice highlighted the trend of London office occupiers withdrawing space from the market for their own occupation.

During the last five years, many firms looked to sub-let office space that they deemed to be surplus to requirements. This added considerably to the volume of office space available in central London. In some cases this was due to relocation, but in most cases because the tenants were shrinking their office workforce.

There are now signs that the wheel is beginning to turn the other way. In recent months Prudential (30,000 sq ft), Barclays (20,000 sq ft), Dealogic (28,000 sq ft) and Willis Insurance (35,000 sq ft) have all withdrawn space from marketing because of re-occupation requirements.

Metropolis’ research team have also spoken to over a dozen large firms which have decided to expand in-situ over summer 2013, choosing to take extra floors rather than wholesale relocation. Many more are mulling this option for 2014.

The trend is important for those in the refurbishment sector, as space previously on the market, can be neglected and at the time of a decision to re-occupy may need extensive remedial work to bring it back up to corporate standard.

Metropolis expect this phase of the market to last up to two years and could result in a substantial volume of space, currently vacant, being re-occupied.

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