The Office Providers – Offices Spaces in Central London
The research, carried out by real estate firm Jones Lang LaSalle (JLL) found that there has been a rise of 12 per cent in the City, compared to last quarter. This is an increase to 7.8 million square feet of office space.
In the West End demand went up by 11 per cent to 4.3 million square feet.
Jonathan Evans, Head of London West End Office Agency at JLL said: “While the increased demand for London office space further demonstrates how strongly the market has recovered since the financial crisis, there is a growing imbalance between quality supply and increasing demand for Grade A space across London.
“As the development pipeline continues to deplete, upward pressure on rents will only get stronger during the rest of the year. During the next six months, the West End market will definitely see prime rents in the core consistently surpassing the GBP 100 per sq ft mark.”
JLL said that activity in the city has continued at a fair pace, despite the uncertainty generated by the tsunami in Japan and the conflict in Libya.
The head of the City of London Office Agency at JLL, Dan Burn, said: “Going forward the Banking and Finance sector will continue to dominate the City market as they look to expand staff numbers, and we expect to see landlords reducing lease incentives during the next few months and pushing hard on rents as supply falls and demand continues to increase.”
He added that the City market will continue to be shaped by flight to quality.
Recently top Tory donor Henry Angest said that if the ‘persecution of bankers’ continues the City could lose its status as a global financial centre.
Editor’s notes: Reporting in Q4 2022, JLL advised that active demand across Central London had increased to just over 8.6 million square feet, which was just below the ten-year average but was up on both Q3 2022 and December 2021 demand levels.
In London’s West End district, demand for office space stood at 4.7 million square feet reflecting a rise of 6 per cent quarter-on-quarter. Of this total, active demand stood at 3.1 million square feet, which constituted a rise of 14 per cent quarter-over-quarter, although this was down 19 per cent on volumes that were recorded in the first quarter of 2022.
In the City of London, demand decreased by 8 per cent to 9.1 million square feet in Q4 2022. This compared to 9.9 million square feet at the end of Q3 and was 7 per cent below the 10-year quarterly average. The quarterly fall was driven by a 20 per cent decrease in potential demand which ended the quarter at 3.0 million square feet, down from 3.7 million square feet in the third quarter. Active demand remained broadly stable at 6.1 million square feet but remained 4 per cent below the 10-year quarterly average of 6.4 million square feet.
It was expected that submarkets across London that were popular with organisations within the Technology, Telecoms and Media (TMT) sector would experience decreases in demand throughout 2023, as layoffs continued.