West End office market quieter in Q3 – GVA Grimley
The third quarter of 2010 was the quietest so far this year for West End office property, says GVA Grimley. The firm’s latest research into the occupier market for office space in central London says a total of 707,340 sq ft was let in the West End during Q3 compared with 771,880 sq ft in Q2. The third quarter level was 5.3% below the five-year quarterly average. Availability has fallen from 7.9% in Q2 to 6.4% in Q3.
Prime rents across the West End have increased by 4.6% over the quarter, and by 21.9% over the last year, GVA Grimley says, with rent-free periods generally remaining the same. Prime rents in Mayfair are now £72.50 per sq ft with 20 months rent-free on a typical ten-year lease, although on super-prime space, rents are up to £90 per sq ft with 18 months rent-free, it notes.
Meanwhile, in the City, take-up shot up to 1.9m sq ft, which is 39% above the five-year quarterly average. This year has already seen 15% more letting activity in the City than in the whole of 2009, GVA Grimley notes, with a lack of new space contributing to a fall in availability to 7.3% from 9% in Q2.
Prime rents for City office property are still rising, up 3.5% on Q2 and 22% ahead year-on-year. Prime rents in the City Core are now £55 per sq ft with 21 months rent-free on a typical ten-year lease and there is increasing evidence of rents achieving over £50 per sq ft, the firm says.
Further east in the Docklands take-up fell sharply, to just 55,380 sq ft in Q3, which was 83% below the five-year quarterly average and 59% lower than in Q2. Availability has increased from 7.0% to 7.6%, with no new development activity. Prime rents have remained stable in Canary Wharf at £37.50 per sq ft, with 29 months rent-free on a ten-year lease, GVA Grimley notes.
