Central London office lettings in July 2018

Central London office lettings in July 2018 reached just over 1.4m sq ft from 41 mid-large size office transactions (5,000 sq ft+) during the month. The July 2018 figure is comfortably above the current monthly London average of 1m sq ft.

July was characterised by 15 office deals over 20,000 sq ft, which were led by the Facebooks’s 600,000 sq ft deal to pre-let 11/21 Canal Reach and Building P2 Handyside Street, N1; WeWork’s 131,000 sq ft deal at Aviation House, WC2 and Houlihan Lokey’s 41,000 sq ft move to 1 Curzon Street, W1.

IT and technology services topped the table of lettings by sector, compiled by Metropolis, underpinned by the huge Facebook deal, plus a deal to Benevolent AI. This was followed by business services led by a number of lettings to WeWork and The Office Group. Financial services, professional and media were also well represented. Office deals ‘under offer’ in central London increased to 3.8m 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 7pc of the office floorspace let in July 2018 at 100,000 sq ft. The West End saw 276,000 sq ft of take-up. Midtown contributed a record breaking 950,000 sq ft of lettings. Current London office demand is calculated to be around 3.6m sq ft in the City and 3.1m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 800,000 sq ft sq ft (57% of the monthly total), as transactions for new space resumed their recent strong showing. Availability is dominated by secondhand space in all London markets.

Metropolis research is currently monitoring 650 ‘live’ London requirements, with deals for space of up to 1.7m sq ft due to sign in the next few months.

Cityoffices is working on its autumn ‘Skyline Survey’ in London. Further details of office scheme planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on Metropolis and the Cityoffices database from Andy King at andy@metroinfo.co.uk


Southbank stokes demand

A recent office market report by Union Street Partners (Farebrother and Tuckerman) featured the rising popularity of London’s Southbank (SE1 postcode), as an office location for companies looking for good quality offices in central London. On a number of schemes, rents have reached £50 psf as a number of major office tenants compete for newly completed space.

Analysts point to demand rising in parallel with recent infrastucture improvements on the Southbank, including the newly SE1 expanded Blackfriars Station including the imminent Thameslink upgrade, as well as improvements at London Bridge in the wake of the completion of the Shard.

The local agents recorded take-up in 2013 of 1.7m sq ft including the 430,000 sq ft letting of The Gem to News International. Figures from Metropolis reveal that there has been deals totaling in excess of 800,000 sq ft for the first 6 months of 2014, including Omnicom’s 340,000 sq ft potential deal at Bankside 2 & 3 in SE1. Other large recent deals in the area have included lettings to General Healthcare (HCA), Charles Tyrwhitt and Ramboll.

A raft of companies have also recently completed deals on the just-completed 240 Blackfriars Road scheme. Cushman & Wakefield have analysed recent office locations between London districts and concluded that Southbank is now the second most popular area to relocate to, after City core. Media and tech companies are the most likely to move office districts.

Metropolis is currently monitoring 50 companies which include Southbank in their search area, including: Intelligent Environments, Eurostaff Group and NSC Global Solutions among many others. If all searches are seen through to successful conclusion this will lead to over 500,000 sq ft of future lettings.

Looking ahead, there are a number of new office developments either underway or planned, such as the 37,160 sq m (400,000 sq ft) King’s Reach Tower, Stamford Street, 100 Union Street and 3 Albert Embankment, which will see a new influx of tenants moving to London Southbank.