Central London office space availability hits 14 year low
All London markets expected to see double digit growth in rent prices by the end of the year
Office availability in Central London fell to its lowest rate in 14 years at the start of 2015, according to commercial property and real estate services advisor CBRE.
The first quarter of the year saw a 3% drop in office availability to 10.8 million square foot, as well as the strongest first quarter take-up of office space for five years with 3.1 million square foot transacted between January and the end of March.
The report has argued that the combination of high take-up and low availability is causing a spike in rent in all markets apart from Docklands. The West End is predicted to see the highest rental growth of 15.6% by the end of 2015, with all markets expected to see a hike in rent costs.
Companies in the financial and business services sectors accounted for 22% and 23% of office take-up respectively, said to be key drivers of new office leasing in all Central London markets.
While rent continues to increase in London, start-ups can find advice on taking advantage of more affordable rent offered by other UK start-ups hotspots such as Manchester, Brighton and Cambridge, in our Where To Start a Business feature.
Emma Crawford, managing director of Central London office leasing at CBRE, commented: “Demand for office space in Central London has been strong, and when coupled with slimmed down supply, it’s only natural that we’ve seen rental growth across the board.
“The rental situation is compounded by the lowest availability for over a decade, and while this is expected to trough in 2015, we still expect rents to climb sharply before they begin to level off.”