Central London office lettings in June 2016 and Q2

Central London office lettings in June 2016 recorded just over 640,000 ft of deals from 35 mid-large size transactions during the month. The June figure represents an increase the 550,000 sq ft in May and brings the central London total for Q2 2016 to 2m sq ft, which is one of the lowest quarterly totals for years. The Q2 total was held back by no lettings over 100,000 sq ft and only three deals over 50,000 sq ft.

June was characterised by 10 office deals over 20,000 sq ft, including Schon Klinik at 66 Wigmore Street, W1; Office Group at York House, N1 and Gorkana at 5 Churchill Place, E14.

Business services topped the table of lettings by sector, helped by several serviced office deals. This was followed by IT boosted by Gorkana’s letting. Media and financial services are also performing well. Office deals under offer remain around 3m sq ft and include two large pending deals in the City. Across Q2 2016 the most active sector was IT, followed by business services and professional. Financial services had a muted quarter.

By area, the City accounted for 48pc of the office floorspace let in June. The West End had a quiet month with only a handful of 5,000 sq ft plus deals in central areas. Midtown continued its steady progress with 100,000 sq ft let and a similar volume of space was let in Docklands. Current London office demand is calculated to be around 4.7m sq ft in the City and 3.5m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 170,000 sq ft (27% of the total), as transactions for newly developed or refurbished space were on hold in advance of the EU referendum.

Metropolis is tracking over 600 London requirements, where a relocation decision is expected in the next 12 months. The Q2 slowdown is predicted to inflate deal volumes in Q3.

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