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18.10.2018, 08:02

Buoyant Third Quarter for London Office Space

Company News, Real Estate, Market News, Property Management, EMEA
Take-up of office space in Central London continues to be resilient according to Global real estate advisor CBRE. The third quarter of 2018 saw take-up reach 3.4 million sq ft, which is above the 10-year average of 3.1 million sq ft.


Emma Crawford, managing director, London Leasing at CBRE.
Emma Crawford, managing director, London Leasing at CBRE.
The year-to-date take-up total reached 9.8 million sq ft which is higher than both 2016 and 2017. The largest deal of the quarter saw Facebook acquire 600,600 sq ft across two proposed developments in King’s Cross. There were a further four deals over 100,000 sq ft in Q3; two of which were in the City, with the two others in the Docklands.


Driven by the Facebook deal, the creative industries represented the largest proportion of take-up in Q3 at 41 per cent, followed by business services (23 per cent) and banking and finance (20 per cent). Business services take-up was led acquisitions by flexible office operators, the largest of which saw WeWork acquire 52,300 sq ft at 1 Waterhouse Square, EC1. Over the last 12 months, flexible office operators have acquired a record 2.4m sq ft in Central London.


Under offers in Central London reached 3.9 million sq ft in Q3 2018, an annual increase of 21 per cent which is significantly higher than the 10-year average of 2.9 million sq ft. The largest unit under offer at the end of Q3 was at 5 Merchant Square where 159,200 sq ft of space is under offer to a confidential occupier on a sublet from Marks & Spencer.


Under offers were above trend in all Central London markets. Over the course of the quarter, under offers increased in the City (+4 per cent), West End (+25 per cent) and Southbank (+1 per cent).


Active demand in Central London was 9.7 million sq ft at the end of Q3 (the figure for Q2 was 9.3 million sq ft), with the finance sector accounting for 28 per cent of active demand, followed by the creative industries sector at 21 per cent.

Commenting on the findings, CBRE's managing director of London Leasing, Emma Crawford, said:
"Q3 saw a resilient performance across the London office market, with requirements for space from the banking and finance sector proving exceptionally strong. In what is a continuing trend, occupiers showed a vigorous preference for new space across the quarter, with new or pre-let space representing nearly half of all take-up, taking it significantly above the 10-year average".

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