London office availability 20th May 2014

Central London availability continued to fall in April, dropping to 13.76m sq ft, the lowest level since June 2008, according to CBRE.

This caused the central London availability rate to fall to 6.2%, significantly below the 10-year average of 7.6%, the agent said. The volume of office space under offer in central London has increased by over 65% since the end of last year to reach the highest level for 13 and a half years.

Under offers are currently at 4.73m sq ft, their highest point since September 2000, when under offers stood at an all-time high of 5.92m sq ft. There are a total of seven buildings across central London with more than 100,000 sq ft currently under offer, the largest of which is Generali Investments’ 10 Fenchurch Avenue, which announced last week that it had signed a deal to lease with M&G.

So far this year, there has been a total of 3.69m sq ft acquired by occupiers in central London, 10% higher than at the same stage last year. Unusually, the largest deal to transact in the month was in the West End, where serviced office operator Office Group acquired 69,100 sq ft of secondhand space at 5 Langham Place, W1.

Emma Crawford, executive director, CBRE said: “The Central London occupational market is continuing to strengthen. Take-up so far this year is ahead of where we were last year and competition for space is noticeably increasing. The combination of record levels of under offers and a healthy level of active demand should see the full-year take-up total for 2014 reach a level comparable to that which we were seeing before the crash. However, a key feature of the current market is how rapidly supply is falling – with levels now 17% below their long-term average and likely to fall further in the next two years due to a limited development pipeline.”