Central London office take up in the first half of 2014 saw a 17 per cent uplift over the same period in 2013, according to the latest update from DTZ.
During June 2014 office take-up in Central London was 1.4 million sq ft, bringing the year-to-date total to 6.6 million sq ft.
All Central London markets, except the North West fringe, saw year-on-year increases in take-up. The biggest increase was seen in the Docklands, with 679,000 sq ft transacted over the first six months of the year, compared to just over 100,000 sq ft at the same point in 2013.
The South East fringe also saw a significant uplift (91 per cent) over the same period in 2013, with 830,000 sq ft transacted this year and the West End and Midtown saw increases of 34 per cent and 21 per cent respectively on the same period in 2013.
Large transactions are also up with 18 transactions over 50,000 sq ft in the first six months of 2013. Half of these were for offices in the City and a further seven were located in the fringe markets of Docklands, South East and North West fringes.
All Central London markets, except the South East fringe, are seeing year-on-year decreases in supply of at least 15 per cent. The North West fringe, the Docklands and the West End have seen the biggest falls in availability over the past 12 months down 53 per cent, 36 per cent and 30 per cent respectively with availability in the City falling 17 per cent over the same time period.
A significant development has been a 33 per cent fall in the availability of second hand space to 5.6 million sq ft over the past 12 months which is now 47 per cent below the ten year average. This is in sharp contrast to the availability of newly built and refurbished space which fell only two per cent over the same time period.
Richard Howard, head of Central London Agency, says: “Availability across Central London has fallen month on month this year and is now 20 per cent below the same period in 2013, as well as being 30 per cent below the ten year average of 16.3 million sq ft. A number of large deals have also been completed in the first half of 2014 and this uptick in leasing activity is expected to continue – DTZ is currently advising on six deals with parties in negotiations to take more than 50,000 sq ft.
“With take up significantly higher than the same period in 2013, these conditions are likely to continue putting upward pressure on rents.”