Central London Lettings – September 2017

Central London office lettings in September 2017 reached a healthy 965,000 sq ft of deals from 61 mid-large size transactions (5,000 sq ft+) during the month. The September figure conforms to the current monthly average of just under 1m sq ft .

September was characterised by 14 office deals over 20,000 sq ft, which included Boston Consulting’s 123,000 sq ft pre-let at 80 Charlotte Street, W1, Metro Bank’s pre-let at 20 Old Bailey, EC4; Costain took 30,000 sq ft at Victoria House, WC1, and Mitie took 30,000 sq ft at The Shard, SE1.

Professional services topped the table of lettings by sector, underpinned by the Boston Consulting deal. This was followed by financial services with the large deals involving Metro Bank. Property and Business services also performed well, helped by the lettings to Costain and Mitie. Office deals ‘under offer’ in central London increased slightly at 3.6m sq ft and pending deal volumes are healthy in nearly all sub-markets.

By area, the City accounted for 33pc of the office floorspace let in September at 314,000 sq ft. The West End saw 263,000 sq ft of take-up. Midtown contributed 242,000 sq ft of lettings. Current London office demand is calculated to be around 3.1m sq ft in the City and 2.8m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 448,000 sq ft (46% of the monthly total), as transactions for new space resumed their recent strong showing.

Some 8.9m sq ft of offices were let in the first 3 quarters of 2017 to end of September 2017.

Metropolis research is currently monitoring 620 ‘live’ London requirements, with deals for space of up to 2m sq ft due to sign in the next few months.

Cityoffices and Metropolis are working on an analysis of lease expiries which were due to expire in 2017 and the latest London Skyline report. The update will contain details of dozens of new office schemes under construction, planning applications and consents, with scheme by scheme detail on the Cityoffices.net website. Details on Cityoffices from Andy King at andy@metroinfo.co.uk

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Central London Office Lettings – October 2016

Central London office lettings in October 2016 recorded over 900,000 sq ft of deals from 26 mid-large size transactions (5,000 sq ft+) during the month.

The October figure represents a rise of 26% from the 720,000 sq ft total in September and a rise in the number of deals over the month. However, much of the October total can be attributed to Apple’s 500,000 sq ft pre-let at Battersea Power Station and remainder of the month was disappointing and would have been the lowest monthly take-up figure since April 2012 .

October was characterised by 9 office deals over 20,000 sq ft, apart from Apple at Battersea; London Borough of Westminster took 57,000 sq ft at 5 Strand, WC2; Deliveroo took 51,000 sq ft at Cannon Bridge House, EC4 and The Economist took 25,000 sq ft at The Adelphi, WC2.

Computer services topped the table of lettings by sector, underpinned by the Apple deal, followed by media sector, boosted by deals to The Economist and Spark44. Public sector also performed well. Office deals under offer in central London edged up to around 3m sq ft and include two large pending deals in the City and one in Southbank. Enquiry levels are up slightly.

By area, the City accounted for only 18pc of the office floorspace let in October. The West End saw 100,000 sq ft of take-up. Midtown contributed 90,000 sq ft of transactions, but Southbank was predominant. Current London office demand is calculated to be around 4.5m 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 613,000 sq ft (65% of the total), as transactions for new space kept momentum.

New research currently being prepared by Metropolis and Cityoffices for a major report on London office construction, reveals that over 14m sq ft of offices are now underway in central London.

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.

Central London Office Deals – September 2015

Central London office lettings registered a small rise to 840,000 sq ft of transactions in September 2015, spread across 52 deals during the month.

September was characterised by 10 deals over 20,000 sq ft, including Deutsche Asset & Wealth Management taking 90,000 sq ft at the Zig Zag building, Victoria Street, SW1; Mediobanca at 62 Buckingham Gate; Universal Music at 4 Pancras Square, N1 and Seven Investment Management at 55 Bishopsgate, EC2.

Financial services topped the table of lettings by sector, helped by Deutsche and seven Investment Management deals office, followed by media boosted by Universal Music’s pre-let. Office deals under offer (including RBC in the City) fell slightly to 3.8m sq ft.

By area, the City accounted for a little under half the deals (21) but only 30pc of the floorspace let in the month as other areas saw a lettings boost. Current London office demand is calculated to be around 6m sq ft in the City and 3.7m sq ft in the West End. Availability fell to 9.6m sq ft, but a large number of new schemes are at demolition stage and soon to be marketed.

The volume of grade A (newly built or refurbished office space) let during the month reached 557,000 sq ft (66% of the total), as transactions for newly developed or refurbished space took a large part of the total.

Metropolis is about to publish a new report on upcoming London office schemes for autumn 2015.

Central London Office Lettings 2014

Sharddong

Best Year For Deals Since 2007

Metropolis has recently published its latest client newsletter, this month a special report on central London office lettings in 2014. Highlights include:

– Central London deals hit 12.8m sq ft, up 5% on 2013 take-up
– 14 deals were over 100,000 sq ft
– Metropolis is tracking over 700 central London office requirements
– Just over 2m sq ft currently under offer

The newsletter was provided exclusively to Metropolis clients. If you are interested in finding out how Metropolis could help your company win new business please visit us at http://www.metroinfo.co.uk.