Activity from large occupiers continues to fuel demand with November take-up reaching 1.37m sq ft, up 37% on the long term average monthly take-up figure, as reported in BNP Paribas Real Estate’s Central London Office Monthly Review: This brings take-up for the first 11 months of 2017 to 11.24m sq ft, 20% ahead of the same period last year and in-line to exceed the long term average of 12.50m sq ft.
The Media Tech sector dominates demand in Central London, accounting for a 20% share of 2017 take-up to end November. Following major commitments to the capital by Media Tech giants Facebook, Apple and Google post Brexit, Spotify also recently announced plans to double its workforce in Central London over the next two years.
Also feeling confident about London’s long term prospects are WeWork who continue their shopping spree acquiring 340,000 sq ft in November, bringing their 2017 take-up, to 1.1m sq ft.
Interestingly, WeWork’s recent 135,100 sq ft acquisition of One Poultry, EC2 in the heart of the City marks a shift away from the traditional fringe buildings usually taken by the serviced operator. The location may help attract Banking & Financial occupiers who are seeking more flexible lease terms.
Furthermore, November also marked WeWork’s first substantial 2017 letting in the West End at North West House, Marylebone Road, NW1.
Supply saw a marginal monthly increase of 2% to 13.40m sq ft in November, reflecting a vacancy rate of 6.22%. The long term average vacancy rate is 7.00%. Tenant supply continues to rise reaching 3.57m sq ft, or 27% of total supply, up from 17% at the beginning of 2017.
