City office latest 14th October 2014

Take-up of office space in the City of London market during the third quarter of 2014 was at its highest point in history, according to data released by CBRE shows Q3 2014 office take-up in the City was 2.32 million sq ft, surpassing the previous high of 2.24 million sq ft seen in Q3 2000.

This took the year-to-date total to 4.84 million sq ft. A total of seven deals of over 50,000 sq ft transacted over the course of the quarter, including two pre-lets over 100,000 sq ft: 430,900 sq ft to Amazon at Principal Place and 322,700 sq ft to M&G at 10 Fenchurch Avenue.

The Creative Industries sector continued to play an important role in terms of City take-up. In Q3 2014 29% of all deals came from the Creative Industries sector, far in excess of the traditionally dominant Banking and Finance sector (22%). The Business Services sector, boosted by deals such as the 66,400 sq ft letting to Ipsos Mori at 3 Thomas More Square, represented an above-average 19% of take-up.

Chris Vydra, executive director, CBRE said: “The news that Q3 2014 was the most active on record is undoubtedly positive news for the market. This also comes at a time when the City availability rate has dropped to 7.9% - its lowest level since 2001. "The low level of availability in the next two years is clearly driving the increase in pre-letting activity witnessed this year and we expect lease events and projected increases in office-based employment to boost demand, especially for space of between 20,000 sq ft and 100,000 sq ft.”

A total of 1.25 million sq ft of space was pre-let in Q3 2014, accounting for 30% of total take-up, almost twice as high as the 10-year average. The remainder of the space let during the quarter was split between secondhand space representing 53% of the total, and new completed space representing 17% of the total. Q3 2014 was dominated by large deals. The average deal size over the quarter was 14,900 sq ft, far in excess of the 10-year average of 8,300 sq ft.

The total aggregate square foot let in Q3 2014 was the highest on record, however in terms of the number of deals, 407 transacted over the course of the quarter, below the 10-year average of 430.