London office report 5th February 2015

The London office market produced its best performance since 2000 last year with take-up of office space in central London rising by 16% to 15.9 m sq ft, according to Knight Frank.

The figure is well ahead of the ten-year average of 13m sq ft. The research was presented at Knight Frank’s annual central London breakfast at the Dorchester Hotel on Park Lane.

Key office leasing market points: •Supply of office space fell by 20% in 2014 to 12.9m sq ft; the lowest level since 2000. •Office rents in the City of London increased by 4% to £62.50 per sq ft, in response to a 24% fall in supply. •In the Northern City district, which covers the tech-biased areas like Shoreditch and Clerkenwell, rents were up 5% to £52.50 per sq ft. •Rents in the prestigious Mayfair district increased by 10% to £107.50 per sq ft. Key investment market points: •Investment sales volume for 2014 was £19.4bn, which is in line with 2013’s figure of £19.6bn and well ahead of the ten year average figure of £13.1bn. •75% of sales by value were to overseas investors.

•Key deals included the Qatar Investment Authority buying the HSBC Tower for £1.2 bn, and Brazil’s Safra Group acquiring 30 St Mary Axe (a.k.a. the Gherkin) for £726 m. •Capital values rose in almost every district.