The amount of Central London office space leased by businesses recovered from a pre-referendum drop to reach 980,400 sq ft in July, according to global real estate adviser CBRE.
This is 24% above the level seen in June and the strongest monthly average since March this year,
CBRE said appetite for London office space was validated by three deals over 50,000 sq ft in July, including a move by Wells Fargo for 220,700 sq ft of space in the City of London, at 33 Central, King William Street, EC4. This has been widely seen as a vote of confidence from the banking and finance sector after the Leave vote in the EU referendum, CBRE said.
The sector accounted for 31% of take-up in July, followed by the business services sector (22%) and creative industries (17%).
July’s office take-up in Central London remained below the 10-year average of 1.1m sq ft per month, but above-trend leasing activity in the City and Southbank suggests that businesses still see London as an attractive place to locate, CBRE said.
Emma Crawford, head of London leasing at CBRE said: “Much has been said about the health of the London office market this year, but clearly demand for office space remains buoyant. Businesses are still confident about London’s significant advantages as a global business centre, even when the UK is outside the EU. This continued demand, mostly driven by key lease events, in a market with low supply, is maintaining headline rents at the same rate as in May and June.
“Of course the jump in leasing activity is good news for the market, and whilst this is not universal across all sub-sectors of the London market, even with heightened economic and political uncertainty, longer term prospects remain promising.”
Available office space increased by 2% over the month to stand at 13.6m sq ft, but remained 7% below the 10-year average, as secondhand, completed and pipeline space continues to enter the market.
Office space under offer fell by 14% over the course of the month to stand at 3m sq ft as a number of large deals completed. However this remains 7% above the 10-year average of 2.8m sq ft.
