ANALYSIS: London’s Midtown market saw office take-up drop by a third in quarter two this year.
Just 321,760 sq ft of space was transacted in quarter two, according to EGi’s London Office Research, a substantial drop of 34.5%. It mirrors the central London market which threw up few surprises in light of recent uncertainty regarding the UK and the EU referendum, with total take-up, as predicted, down on the previous year pretty much across the board.
London office take up falls 44% in quarter two >
Occupiers’ hesitancy to get involved in large-scale deals is clear from our Q2 figures and in stark contrast to previous quarters. In Midtown the top disposing agent, Farebrother, signed 10 deals to achieve 101,000 sq ft (approximately 50% of Savills’ table-topping performance of Q1, 2016). Midtown’s top agent in each of the previous four quarters had never completed more than six deals and never transacted less than 189,000 sq ft.
Farebrother’s Q2 performance was thanks largely to its involvement in the 37,318 sq ft letting at 246 High Holborn, WC1, and two separate lettings at 120 Holborn, EC1, totalling approximately 30,000 sq ft.
Farebrother’s total space disposed would normally ensure it a mid-table position in Midtown. Clearly agents are having to work harder on a greater number of smaller deals to rack up the numbers in the current market conditions.
Whether this can be solely attributed to referendum-related reticence or whether it’s a continued symptom of the general slowdown in the London market, with availability continuing to dry up, isn’t entirely clear.
It’s all eyes then on the remainder of 2016 for a better indication of the trends we can expect to manifest in London’s short- and medium-term future, and the full impact that Brexit has ultimately had on London’s commercial property market.
