Colliers has released research which states that the take up of Grade A office space in the UK capital is to remain high, following the trend in the first half of this year.
The first two quarters of 2011 saw net stock absorption of central London office space reach 1.8 million square feet.
Consequently, vacancy rates in these areas have continued to fall significantly, especially in the West End.
In the West End six-month occupancy rose at its fastest since the financial crisis back in 2008. The occupancy rate now stands at 94 per cent.
And the availability of office space in central London is at a 30-month low mostly due to a scarcity of Grade A office space.
Competition for Grade A space will remain the key driver of rental uplift during the remainder of 2011. Despite that, overall 2011 take up is likely to be below average in both the City and West End markets,” said Mike MacKeith, Head of Central London Offices at Colliers International.
“Absorption appears to have peaked in the City and is close to peaking in the West End. Nevertheless, we expect to see increased absorption of good quality second-hand stock as Grade A product becomes scarcer. We expect increased pre-letting activity not just in the City but in the West End also, as the lack of new supply limits the Grade A offering to new entrants and expanding occupiers seeking high spec product in core locations,” he added.
Recently statistics from the Royal Institute of Chartered Surveyors have shown that the London commercial property market is significantly outperforming other cities in the UK.
Editor’s notes: In 2022, the annual office leasing volume in Central London reached 10.1 million square feet which was an 18 per cent improvement on 2021’s figures.
The vacancy rate across Central London was 8.5 per cent.
In that year, there was 4.1 million square feet taken up through office space lettings in the West End of London which was 11 per cent higher than the 10-year average.
The vacancy rate in the West End was 6.3 per cent.
In the City of London, the full-year office space take-up to 5.2 million square feet which was 23 per cent higher than in 2021, but 6% below the 10-year annual average.
The vacancy rate in the City was 9 per cent.