London 2015 take-up tops 12m sq ft..Again

The results are in on central London office take-up in 2015.

Total transactions over 5,000 sq ft in the year amounted to 12.2m sq ft researched by Metropolis, a similar figure to 2014. The lettings breakdown included nearly 6m sq ft in the City; 1.2m sq ft in Docklands; Midtown 2.2m sq ft; West End 2.7m sq ft; Southbank 0.3m sq ft.

By office grade, a substantial 5.9m sq ft of the 12.2m sq ft was grade A, ie newly built or recently refurbished space. Some of the larger examples of grade A lettings included a flurry of deals at the Straford Quarter, Aldgate Tower, Leadenhall Tower, Alphabeta Building, Park House in Oxford Street and 58 Victoria Embankment. The highest rent recorded was nearly £100psf in a recently completed Mayfair scheme. Although the year saw more than 20 substantial pre-lets, the majority of grade A lettings came after the building completion. Developers seem to be benefitting from the ‘build it and they will come’ philosophy.

The most active sectors in 2015 are set out below. All figues in million sq ft.

Financial 3.2
TMT 2.5
Business Services 1.8
Professional 1.6
Insurance 0.4

Although financial services heads the list with 3.2m sq ft of deals, boosted by large pre-lettings to Deutsche Bank and Royal Bank of Canada, it was closely followed by TMT (technology, media and telecom). Large deals included Google, Facebook, Universal Music and Hewlett Packard. Also showing strongly are business services (WeWork took over 500,000 sq ft) in the year and professional services was boosted by big pre-lets to ashurst Morris Crisp and Deloitte.

Looking ahead to 2016, a similar year is in prospect. Some 7m sq ft of un-let speculative office space is under construction in central London, with a further 8m sq ft at demolition stage, according to Cityoffices.net. There are office requirements totaling around 10m sq ft for the City, Midtown, West End, Docklands and Southbank, plus a further large tranche of companies making decisions on future lease expiries. Based on current trends upto 6m sq ft of demand could go to under construction or newly refurbished space with a similar volume of secondhand space lettings. So another 12m sq ft of deals in 2016 is likely.

Metropolis Movers Review of 2015

On the last day of 2015 Metropolis looks back on the year and some of the most notable of the 6,000 + office moves and business opportunities we researched during the year.

Financial Conduct Authority‘s pre-let of 425,000 sq ft of offices at Lend Lease’s International Quarter in Stratford, London, E15 was the largest deal of the year and the requirement was first tipped by Metropolis in autumn 2013.

Ashurst, the law firm, pre-let the 275,000 sq ft Fruit and Wool Exchange Building in the City of London in July 2015. Metropolis has been reporting on Ashurst’s plans since early 2013.

Royal Bank of Canada took 250,000 sq ft at the planned 100 Bishopsgate scheme in November 2015, however Metropolis has been writing about its requirement for up to two years prior to the deal.

DLA Piper signed for 140,000 at a refurbished Mitre House in London, EC2 in summer 2015. However Metropolis has been tracking DLA Piper’s requirement since June 2013.

Bouygues signed for 72,000 sq ft at Becket House, Lambeth Palace Road, London, SE1 in December 2015 after a search which Metropolis has been updating clients on since mid-2011.

KPMG signed for a 60,000 sq ft move to Sovereign Street in Leeds in a move first tipped by Metropolis in 2011.

Shoosmiths, the law firm, signed a pre-let to take 32,000 sq ft over 2 floors at Allied Londons XYZ Building after a search (often denied by the firm itself) first tipped by Metropolis in early 2013.

BDO LLP, the accountant, signed for 24,000 sq ft in the Snow Hill area of Birmingham in November 2015 after a search that started in early 2014.

Audit Scotland signed for 15,000 sq ft at 2-6 George Street, Edinburgh in November 2015 after a search first tipped by Metropolis in May 2013.

EDF Energy was close to a 70,000 sq ft deal at Finzels Reach, Bristol in December 2015 after a search first reported by Metropolis in January 2013.

As we prepare to research for the next 6000 office movers of 2016 – A Happy and Prosperous New Year to all Metropolis blog readers!