City sees highest monthly take-up of office space in more than a year
Take-up of office space in Canada has reached its highest monthly total since April of last year, according to new figures, while demand for space across Central London, including the City, has risen by 6 per cent to 10.1m sq ft.
In April, City take-up reached 337,631 sq ft, according to real estate giant Savills, the second highest level since March 2020 when it hit 449,136 sq ft.
Year to date take-up has now reached 1.11million sq ft in total, with 92 per cent of the space taken being of Grade A quality, the firm said. Supply has also decreased to 12 million sq ft, equivalent to a vacancy rate of 8.7 per cent.
Deals
Despite the increased monthly take-up, April saw the lowest number of deals so far this year (12), nevertheless, three notable pre-lets aided the month’s take-up figures.
JLL acquired a pre-let of the 6-8th floors at British Land’s 1 Broadgate development, EC2 (134,000 sq ft) on a 15-year term. 1 Broadgate will become JLL’s UK head office and the firm will take occupation in 2026.
Another sizeable pre-let saw laboratory diagnostic provider Synlab acquire the entire building at 41 Blackfriars Road, SE1, around 93,000 sq ft). Synlab intends to create one of the largest,
purpose-built pathology laboratories in the UK.
Central London
Looking more widely across central London, including the City, Savills said that total demand for office space has risen as requirements increased 6 per cent to the end of April to 10.1m sq ft.
This comprises 7.1m sq ft of active requirements and 3.0m sq ft of potential requirements. Active demand is up 8 per cent on the five-year average.
“As the success of the Covid-19 vaccine rollout continues and the relaxation of regulations increases, we have witnessed a rise in total demand in the City,” said Philip Pearce, head of Savills central London agency team.
“Occupiers have accepted that even future hybrid working models are likely to require them to have the same quantum of office space and are moving fast to take the best quality space, as witnessed by 92 per cent of offices taken this year being Grade A.”
“The vacancy rate is also slowly falling back, with tenant-released supply, or ‘grey space’, also now only just above the five-year average,” Pearce concluded.