London Office Market in 2018

Central London office lettings in 2018 reached just over 12.3m sq ft from 554 mid-large size office transactions (5,000 sq ft+) during the year. The 2018 figure matched the 2017 London take-up total, but with slightly fewer deals.

2018 was characterised by 167 office deals over 20,000 sq ft, which were led by two large deals Facebook in Kings Cross and The Chinese Embassy at the Royal Mint; followed by a clutch of smaller, mainly pre-let deals to Sumitomo, WPP, Sidley Austin and WeWork.

IT and business services topped the table of lettings by sector, compiled by Metropolis, underpinned by the Facebook deal and the large number of lettings to serviced office operators. This was followed by financial services led by lettings to Sumitomo, BGC and TP Icap. Insurance, professional and media were also well represented. Office deals ‘under offer’ in central London remained at 3.1m sq ft, and pending deal volumes are healthy in nearly all sub-markets, with a number of deals pending.

By area, the City accounted for 43pc of the office floorspace let in 2018 at 5.3m sq ft. The West End saw 2.5m sq ft of take-up. Midtown contributed 2.4m sq ft of lettings and Docklands 900,000 sq ft. Current London office demand is calculated to be around 3.7m sq ft in the City and 3.2m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the year, reached a healthy 6.5m sq ft sq ft (53% of the yearly total), as transactions for new space continued their recent strong showing. Availability is dominated by secondhand space in all London markets.

Metropolis research is currently monitoring 645 ‘live’ London office requirements, with pending deals for space of up to 1.4m sq ft due to sign in the next few months.

Details on Metropolis database from Paul Ives at paul@metroinfo.co.uk

Metropolis Office Mover Leads in June 2018

Metropolis ran 562 business leads on ‘office movers’ in June 2018. If all reported moves were added together the total would exceed 14 million sq ft of office searches and transactions, researched by Metropolis’ unique market-led intelligence research team, last month.

London was the largest region with 240 business leads during month, but there were also strong showings from the South East (60),  Scotland (51) North West (43) and Yorkshire (35) . Business services and financials services were the largest business sectors planning relocations or agreeing moves during the month.

The relocation leads covered the whole UK and provided details of the size of the office occupier, company likely move dates, a description of the reasons for the move, its business sector and full contact details including an address for written inquiries, at least one telephone number and in most cases an email address. Some of the largest planned moves and top picks amongst the 562 June leads, included those on occupiers Amazon, British Airways, Barclays, Scottish Office and WeWork.

The June 2018 leads included 171 ‘identified requirements’, including 84 in London. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 171 searches, 100 were newly posted office searches, not previously notified to clients.

The most recent research also included 160 ‘potential movers’ which were mainly longer-term leads on occupiers, considering a relocation, but the occupier has yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have just signed for new office space and have set a move date, including some large pre-lets and companies inviting tenders for fit-out contracts. The shortest planned move date is just over a month away, whilst the longest was late 2020.

Recent research by Metropolis concluded that a conservative estimate of ‘live’ business tender opportunities on the database in recent months, exceeded £1bn of business.

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