Demand for West End offices is rising – Jones Lang LaSalle
Take-up of office space in the West End of London was subdued during July, says Jones Lang LaSalle, with 102,00 sq ft let across 10 transactions. So far this year 1.4m sq ft has been let compared with 1.6m sq ft at the same point in 2011.
Demand is rising, with month-on-month active demand up 12% to 3.7m sq ft, driven by nine new requirements coming to market totalling 500,000 sq ft, Jones Lang LaSalle says. The firm notes that the TMT sector continues to drive demand for West End offices, accounting for 55% of the total.
Meanwhile, supply remained stable in July at 3.5m sq ft, reflecting an overall vacancy rate of 3.9%. Of this, Grade A supply was 2.4m sq ft, reflecting a vacancy rate of just 2.7%.
JLL notes that investors remain strongly interested in prime West End office space, particularly European investors that are seeking to invest in this area of London as a result of eurozone uncertainty. Around 50% of the volume transacted in Mayfair offices during 2012 has been from European investors, the firm points out.
