Tumbling take-up and rising vacancy rates have raised fears over rents in London’s Docklands.
Provisional figures from CBRE, BNP Paribas Real Estate and EGi show just 90,000 sq ft of space was taken up in the three months to the end of June, compared with a quarterly average of 232,000 sq ft.
The Economist’s deal for 45,000 sq ft at 20 Cabot Square accounted for half of the overall activity.
The total Docklands vacancy rate now stands at 1.6m sq ft, or 8.63%, the highest since Q4 2009.
The amount of space under offer in Q2 was just 16,000 sq ft against a quarterly average of 194,500 sq ft.
And the amount of available space in Docklands is due to increase with law firm Clifford Chance planning to market up to 420,000 sq ft at its 1m sq ft headquarters at 10 Upper Bank Street over the coming months.
It will start with 100,000 sq ft let to the London Organising Committee of the Olympic and Paralympic Games, which is now surplus to requirements.
The Olympic organiser also occupies 90,000 sq ft at Citibank’s 25 Canada Square, with a lease expiry in December and 100,000 sq ft at Barclays’ 1 Churchill Place.
One agent said: “At current levels of demand it is going to take a very long time to fill the vacant space, and that is going to have a depressing effect on deals in the area.”
Take-up rates in Docklands are traditionally lumpy, but a lack of significant requirements targeting the area could mean the figures remain low.
Canary Wharf Group said its estate, which sits within the wider Docklands, was 96.1% let, with a 14.9-year weighted average unexpired lease term.
A spokesman said: “All our recent lettings with BNY Mellon, European Medicines Agency, BBVA and Metlife, have been above the £40 per sq ft mark, reducing the differential with the City.”
Jack.sidders@estatesgazette.com
