Central London office lettings in September 2016 recorded nearly 720,000 ft of deals from 50 mid-large size transactions (5,000 sq ft+) during the month. The September figure represents a rise of 23% from the 580,000 sq ft total in August and a rise in the number of deals over the month. However the Q3 London take-up figure of just over 2.1m sq ft was disappointing.
September was characterised by 8 office deals over 20,000 sq ft, including WeWork at Aldwych House WC2; PA Consulting at Verde Building, SW1; Government Digital Service at the Whitechapel Building, E1 and DNV GL Group at Southbank Tower, SE1.
Professional services topped the table of lettings by sector, helped by the PA Consulting deal, followed by media sector, boosted by deals to Time Inc and Havas. Business services also performed well. Office deals under offer in central London remain around 2.9m sq ft and include two large pending deals in Midtown. Enquiry levels are up slightly.
By area, the City accounted for only 26pc of the office floorspace let in September. The West End saw 240,000 sq ft of take-up. Midtown had a good month with 170,000 sq ft of transactions. Current London office demand is calculated to be around 4.3m 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 month reached 293,000 sq ft (41% 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 there over 3m sq ft of speculative office space went under construction in Q2 and Q3 2016.
Copyright Metropolis Property Research Ltd 2016