London is on the cusp of a large wave of prelets as occupiers look to secure new space amid dwindling supply, Knight Frank has forecast in its 2018 London Report.
Although 6.9m sq ft of offices were under construction at the end of 2017 – 20% above the long-term average – less than three-quarters of that will be delivered in the next two years.
That means the development pipeline satisfies just over half of tenant demand, assuming an average take-up of 9m sq ft. This will likely drive occupiers to secure new space ahead of any lease events.
Knight Frank suggested that supply in the market has peaked and will continue to fall as long as employment remains high – as is expected – and occupiers act fast to ensure their offices’ futures.
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