London office update 27th January 2014

Central London take-up in 2013 reached 12.9m sq ft, up 26% year-on-year, according to new research from BNP Paribas Real Estate.

BNP PRE’s central London offices MD, Dan Bayley, said: “The year has been dominated by large deals in emerging markets, such as Google’s 800,000 sq ft deal in King’s Cross and News UK‘s 430,000 sq ft deal at The Place, London Bridge.

TMT occupiers such as Facebook, Twitter and LinkedIn also signed above average size deals to ensure the sector accounted for 34% of all deals in 2013.” When analysing the submarkets, take-up in the City increased sharply in Q4 2013 to 1.83m sq ft, a rise of 56% on the previous quarter.

Overall take-up in the City for 2013 reached its highest level since 2010, at 5.81m sq ft, up 30% compared to 2012. In the West End, although take-up decreased in Q4 to 0.607m sq ft, take-up for 2013 rose by almost 5% reaching 2.83m sq ft. In Midtown, take-up decreased slightly in Q4 with a 3% dip but year-on-year take up rose 60%, mainly driven by the Google deal.

Over on the Southbank, the largest ever media leasing deal with News UK, saw take-up in 2013 reach 1.45 m sq ft, its highest level since 2007. The area continues to be an emerging key office location within the Central London market and is attracting tenants from across a variety of sectors, with key deals in Q4 2013 coming from both the professional services and public sectors.

“Looking ahead, we expect to see more large pre-let deals this year, particularly from known requirements in the banking and finance sector. In most markets we also expect rents to rise in 2014, as supply contracts and vacancy rates fall,” added Bayley.