West End office space take-up jumps in Q2 – Knight Frank
Take-up of office space in the West End reached 1.1m sq ft in Q2, says Knight Frank, which is a jump of 54% from the previous year and close to the long-term average of 1.2m sq ft. The figure was down 27% from Q1, but the first-quarter figure was inflated by the 800,000 sq ft Google deal at Kings Cross.
Knight Frank says there was around 600,000 sq ft under offer by the end of May, which was 33% higher than the volume under offer at the end of April. Most activity was in the core West End area, with several transactions under offer at rents of more than £100 per sq ft.
The largest deal of the second quarter was at The Point on North Wharf Road, W2, where Instant Offices completed on the third and fourth floors, totalling over 46,000 sq ft on a 10-year lease with a fifth-year break. The rent was agreed at £53.50 per sq ft with 14 months’ rent free. CH2M Hill will occupy both floors, on two separate leases, Knight Frank notes.
Second-quarter supply fell 9% to 5.0m sq ft, the firm says, reflecting a vacancy rate of 5.5%. Availability in the West End is now just over 24% below the long-term average of 6.6m sq ft. The level of new and refurbished space fell from 1.6m sq ft to 1.4m sq ft during the quarter, Knight Frank points out, with only 335,000 sq ft available in the core. Prime headline rents remained at £95 per sq ft for the fifth quarter in a row, the firm adds.
