Office availability in London’s Midtown could hit a record low of sub-3% next year as take-up looks set to hit 2m sq ft in 2014.
The forecast from Midtown specialist Farebrother came as third-quarter take-up exceeded 630,000 sq ft – 31% above the five-year quarterly average.
Despite close to 500,000 sq ft of refurbished stock coming to market during the quarter – including London & Regional’s 150,000 sq ft 10 Bloomsbury Way, WC1 – availability stands at just 4.1%.
And with just 400,000 sq ft due to be delivered in the whole of next year, Farebrother said the supply squeeze would hit record proportions.
Partner Julian Hind said: “Midtown is central London’s most over-subscribed market. Landlords with options to dispose of leases and free up space should carefully consider it, as we will continue to see strong rental growth and headline rents push towards 2007 highs.”
Farebrother investment partner Alastair Hilton said the conditions had helped to tighten yields to record levels.
“While this is symptomatic of the weight of capital boosting for placement across London, it also reflects Midtown’s performance potential,” he said.
jack.sidders@estatesgazette.com
