London office rentals 3rd October 2012

Central London saw 2.1m sq ft of office space leased in the third quarter of the year, according to new research from CBRE.

This figure represents a 14% fall quarter on quarter, but the amount of space under offer sparks cause for optimism in the capital. In particular, demand for space in the West End market has become increasingly competitive, where space under offer rose sharply by 32% to 907,000 sq ft helping to push availability down 13% quarter-on-quarter.

The quantity of space under offer in the City is above trend at 1,262,000 sq ft. These strong figures points to a recovery in leasing levels towards the end of the year.

In Central London, the West End and Docklands were the only markets that recorded quarter-on-quarter increases in office take-up.

The Docklands market witnessed a surge in leasing activity this quarter, up 134% on the second quarter of 2012. 187,000 sq ft was let, the highest figure in 2012. This was buoyed by The Financial Ombudsman Service Limited’s acquiring 165,395 sq ft at Exchange Tower, the single largest letting in Central London during the quarter.

Emma Crawford, executive director, Central London agency, CBRE said: “While the fall in availability is encouraging, the market will focus on the high levels of space under offer. This will herald a welcome strong final quarter from a leasing perspective and demonstrate the enduring appeal of London as a business location.”