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News Release


Surging Central London Office take-up for third consecutive year

City and West End prime rents at an all-time high

London, 21 December 2015 – Office take-up in Central London is on track to hit 11.9 million sq ft in 2016, continuing an exceptional run of leasing activity that began in early 2013, and making it three consecutive years above 11 million sq ft for the first time.

Take-up is well above average in all three London markets, with the City market on track to exceed 6.5million sq ft, the West End 3.7 million and Docklands and East London 1.7 million sq ft.

City leasing volumes have not matched the exceptional volumes transacted in both 2013 and 2014, when take-up reached 7 million sq ft, but still reflect buoyant occupier demand. Over the past year leasing activity in the City has been spread relatively evenly across business sectors with service industries (27%), professional (24%) and banking and finance (22%) sectors, accounting for the largest shares.

Meanwhile, a strong final quarter in the West End means that annual take-up is on course for the highest annual total since 2007, boosted by continued strong demand from tech occupiers, with Google, Facebook and all acquiring large units of space in 2015.

Robust take-up is driving strong rental growth. The strongest growth this year has come in the City where prime rents are up by 12%, now £70 per sq ft. In the West End core of Mayfair and St James, prime rents have increased to £120 psf from £115 psf, with even higher growth in surrounding sub-markets such as Soho, Covent Garden and Fitzrovia.

Neil Prime, Head of UK Office Agency at JLL, commented:

 “The Central London market has tightened significantly throughout the year which has led to surging rental performance in the City market in particular. The development pipeline is slowly building, but completions in 2016 will be inadequate to rectify the demand/supply imbalance, and as such we expect to see a continuation of competitive tension among occupiers driving rental growth.

“It is striking that the City market has performed so well given a relatively modest share of activity from the financial sector. However, with banks and other financial occupiers now representing around 40% of active requirements, we expect to see them exert a stronger influence on the market in 2016, which will only add the pressures on availability of new floor space.”

Ben Burston, Head of UK Office Research at JLL, commented:

“Three consecutive years of very high take-up is testament to the persistent strength of London’s economy, notwithstanding a subdued global economy in 2015.

“With the domestic economy set for sustained growth in 2016, and an improving global economic picture, we expect a continuation of robust occupier demand. However, available floor space is dwindling fast, and the pendulum has now swung firmly in landlord’s favour, so we may see slightly lower take-up in 2016, but continued upward pressure on rents.”



Key highlights
- The first major pre-lets in Stratford to FCA and TfL have boosted the East London take-up to the highest annual total since 2010
- Pre-leasing remains a major feature of the market across Central London, accounting for 27% of 2015 take-up. Unusually, pre-leasing has been more prominent in the West End than the City due to the critically low levels of existing supply.
- The continued strength of demand has seen robust rental growth in the core markets, with prime rents in the West End now at record levels. 
- The supply squeeze will act as a curb on leasing volumes in 2016, with vacancy now down to 3.8% in the City, 2.4% in the West End, and 5.4% in Docklands. Lowest vacancy since 2000.
- The strong momentum is expected to continue into 2016 with a further 2.6 million sq ft under offer across Central London, 21% ahead of the 10 year average.