11m sq ft of lettings
Central London office take-up in 2016 reached just over 11m sq ft after a rollacoaster year in which lettings started strongly, then all but died off during the middle of the year, but came back strongly in the final quarter.
Although the 2016 total falls below the 12m sq ft and 12.8m sq ft of office transactions (deals of 5,000 sq ft and over only) in 2015 and 2014, for many months the referendum looked like keeping transaction levels below 10m sq ft. In the end, large 500,000 sq ft deals concluded in the latter part of the year to Apple and The Government Property Unit, helped dig 2016 out of a hole.
The ten largest deals of the year were:
Government Property Unit (GPU) 536,398
Thomson Reuters 315,536
Freshfields Bruckhaus Deringer 300,000
Cleveland Clinic 233,000
Wells Fargo 220,747
Financial Times 182,635
New Look 127,094
The City contributed 4.9m sq ft of office lettings during the year. The West End took 2.7m sq ft of transactions. Docklands took 1.3m sq ft, Midtown took 1.1m sq ft of deals and Southbank saw 1m sq ft of space signed for.
In terms of business sector, the top seven were:
Financial Services 12%
Business Services 8%
Public Sector 8%
Technology and public sector were particularly boosted by the Apple and GPU deals, whereas the Freshfields pre-let helped the professional sector. The combined ‘TMT’ sector would outperform all others. Looking ahead the 600 London requirements for 2017 follow a remarkably similar pattern.
Over 40% of the space let during the year was ‘Grade A’ or not previously occupied office space, underlining the continued success of new office schemes in attracting tenants.
Copyright Metropolis Property Research Ltd 2017