Central London’s office vacancy rate has hit a 14 year low and is expected to achieve historic lows in the next two years, according to the new Knight Frank Central London Quarterly Report. The West End is seeing the lowest vacancy levels since 1989 and it is less now than at the height of the dot com boom in 2000.
Highlights:
10.3 million sq ft Central London offices available, down 29% since last year.
West End vacancy rate at 3.4%, lowest since 1989.
Central London vacancy rate at 4.4%, down from 6.2% a year ago.
City vacancy rate at 5.1%, down from 7.3% a year ago.
James Roberts, Head of Commercial Research at Knight Frank, said: “The supply situation in central London is now very tight – at a fourteen year low for the capital as a whole, and at its lowest since 1989 for the West End. This is moving the market firmly in the landlord’s favour, and tenants are discovering when their leases come up for renewal that they are facing significant rent hikes.
“Consequently, more firms are choosing to be open-minded on location, and are looking at offices in up-and-coming areas, whether it is King’s Cross, Aldgate, Shoreditch, or Southbank. Effectively, it is an office market equivalent of what happened in the housing market in the 1980s when young professionals began moving into places like Lambeth and Clapham, and gentrified those areas.”
