Central London office availability drops to 14 year low
A report from CBRE has revealed that office availability in London has fallen to the lowest levels since the early 2000s.
The amount of available office space in the centre of the capital fell by 3% in the first quarter of 2015, dropping to 10.8m for the first time in 14 years.
Emma Crawford, Managing Director for Central Office Leasing at CBRE, said: “Demand for office space in central London has been strong, and when coupled with slimmed down supply, it’s only natural that we’ve seen rental growth across the board.”
The report also revealed that the start of 2015 has seen the strongest first quarter take up office space in five years, with 3.1m sq ft of space transacted between January and March.
The increased demand for office space, combined with low availability, is placing substantial pressure on rents, which grew in all central London markets aside from the Docklands.
Crawford said: “The rental situation is compounded by the lowest availability for over a decade and while this is expected to trough in 2015, we still expect rents to climb sharply before they begin to level off. 1.6m sq ft of speculative development is scheduled for delivery this year, but strong letting activity will see much of this space absorbed quickly.”
With any new space expected to be snapped up quickly, it is believed these new office developments will have little effect on availability.