A record-low shortage of speculative space in London has left the city with a pipeline of 1m sq ft, according to Colliers International.
In its London Offices Q1 2019 Snapshot, the agent reported speculative development levels are at their lowest for almost two decades, with overall availability 15% below the 10-year average.
The current slowdown outside the West End is due to “record-breaking demand in Q4 2018”, which has produced a “modest lag in deal execution at the start of 2019”, according to the report.
Paul Smith, co-head of London offices at Colliers International, said: “Supply levels of new development space are almost at a standstill and, while 2020 will see new product delivered, the intervening shortage will continue to provide occupier motivation for securing prelets.”
Investment activity totalled £3.1bn in Q1 2019, with the City accounting for more than £2bn of deals and the West End more than £1bn. Both markets were marginally up on Q1 2018, although the West End was 33% down on the 10-year Q1 average, the agent reported.
John Olney, co-head of London offices capital markets, said: “With Brexit uncertainty set to continue until at least Q4 2019, transaction volumes have reduced.
“However, with very limited opportunities currently available on the market, pricing remains stable.”
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