Summer lull in the City – Jones Lang LaSalle
The summer lull in the City of London offices market meant that only 127,000 sq ft was taken up in July across 11 deals, says Jones Lang LaSalle. This is well below the monthly average of around 300,000 sq ft. So far this year 2.1m sq ft has been transacted compared with 1.9m sq ft at this point last year.
The TMT sector has accounted for 26% of take-up so far this year, compared with a long-term average of 11%, JLL notes. It also accounts for 30% of total demand, compared with a long-term average of 17%.
Active demand for City office space increased 3% month-on-month to 6.5m sq ft, driven by two large requirements activating their search. Overall demand rose slightly to 9.5m sq ft, the firm says. Three quarters of requirements over 50,000 sq ft are driven by a lease event or consolidation, JLL points out.
The completion of the Shard helped to boost the total supply of City office space by 8.5%, and the overall vacancy rate rose as a result, reaching 7.5% at the end of July. The Grade A vacancy rate also increased, to 5.3%.
