More promising figures from central London’s office take up
I wrote at the end of the first quarter that despite the relatively high take-up figures, caution was required. Of the Q1 take-up figure of 2.65m sq ft, around a third could be attributed to a single deal: Google. This quarter is different. Take-up has outstripped Q1, and it is not reliant on one marquee deal.
Once again the City core has excelled, with key lettings to Amlin and Amazon. The insurance and TMT sectors remain prominent, but this time there is support from elsewhere as lawyers Bird & Bird signed a significant prelet to keep the figures in Midtown looking healthy. Saatchi & Saatchi also committed to 100,000 sq ft at Derwent London’s 40 Chancery Lane .
I wrote at the end of the first quarter that despite the relatively high take-up figures, caution was required. Of the Q1 take-up figure of 2.65m sq ft, around a third could be attributed to a single deal: Google. This quarter is different. Take-up has outstripped Q1, and it is not reliant on one marquee deal.
Once again the City core has excelled, with key lettings to Amlin and Amazon. The insurance and TMT sectors remain prominent, but this time there is support from elsewhere as lawyers Bird & Bird signed a significant prelet to keep the figures in Midtown looking healthy. Saatchi & Saatchi also committed to 100,000 sq ft at Derwent London’s 40 Chancery Lane .
Continuing west from the City core, through Midtown and over to the West End, the picture is somewhat different.
The constrained market is taking its toll and take-up of only 525,000 sq ft was recorded – this is the seventh lowest quarterly total since the start of 2007. ?I suggested earlier in the year that rents of £130 per sq ft could be achieved in the West End this year, and Q2 has seen levels not too far from this with Noble Energy taking 8,000 sq ft on a 10-year lease at £120 per sq ft, albeit with a 19-month rent-free period.
Hope for the West End comes in the form of the amount of space under offer, which is up by around 22% on last quarter. Elsewhere, despite the bumper quarter witnessed in the City Core, under offer is also on the up at 23% above last quarter. The market as a whole rose by 32%.
Should the under offer space be converted into deals in the remaining months of the year, 2013 could be one of the better years, post-Lehman.
At present, take-up for the year is tracking well, and the under-offer figures point to a strong second-half to the year. Over the past six years H2 take-up has, on average, been 55% of the annual total, if we assume that figure for this year and extrapolate, then we are looking at a total of 12.8m sq ft for 2013. All we need now is another Google deal…
