Healthy demand for West End offices – Colliers International
Colliers International calculates that take-up of office space in the West End of London in the final quarter of 2012 was down significantly from the previous quarter’s strong total, due partly to lengthy negotiations on some deals. Expectations that major pre-lets would be concluded before the year-end were only partly met, it notes.
However, demand for West End offices remains healthy, particularly from tech companies, with recent announcements including Facebook seeking 30,000 sq ft of overflow office space, Freemantle Media wanting 50,000 sq ft of offices and advertising agency Havas now looking for a headquarters of 200,000 sq ft, notes Guy Grantham, director of research and forecasting at Colliers International.
Despite the number of major speculative office completions and moderating transactional activity, rental levels are continuing to rise. Top rents for Mayfair offices at the end of 2012 were around £110 per sq ft, Mr Grantham notes, and there is potential in some pockets of the West End for further increases in the short term, given exceptionally low vacancy rates. “There is a healthy pipeline of demand which should encourage renewed letting activity in Q1 2013,” he adds.
