Even a cursory look at the figures confirms London’s leading position among the UK’s cities
in terms of office take-up growth.
Figures from EGi Research, revealed at a MIPIM UK debate hosted by Estates Gazette and GL Hearn examining the gap between London and the regions, showed a massive difference in take-up.
In the first six months of 2014 a total of 2.4m sq ft was let across the UK’s cities, an increase of 5.3% on the previous year. In London, 6.1m sq ft was let, a whopping 34.5% increase on the same period in 2013.
And London’s strong start is set to get stronger. While take-up volumes in UK cities are expected to finish at 5.3m sq ft, a small dip on 2013 levels, London is preparing to have its best year since 2006, with just over 14m sq ft of letting deals expected to complete by the year end.
“Central London and the London economy is what was always going to lead the UK out of trouble,” said Simon Durkin, head of real estate asset research at Deutsche Bank. “Steady growth will
affect London first and then lead out to the regions.”
Veteran developer Nigel Hugill, executive chairman of Urban & Civic, agreed.
“The leading job-creating regions of the past 15 years have been western Germany and southern England,” he said, “and ultimately property reflects the economic inputs of the markets they inhabit.”
He went on to ask what could be done to balance things up between London and the UK’s other cities.
Hugill said the most obvious answer was to improve rail links to London, as it was an “empirical fact” that doing so benefits both ends of the line.
“The benefits of having strong rail links to London for small cities are conspicuous and should not be underestimated,” he said.
Graeme Tulley, director of planning at GL Hearn, was optimistic for the future of the regions, however. “I am confident the development wave will spread through the country,” he said.
Durkin concluded that the UK’s cities needed to make sure they focused on what differentiated them from the capital.
“Cities need to build on the areas that set them apart from London,” he said.
