Colliers International have this week reported that the amount of office space available across London will continue to be limited for at least the next 18 months.
70% of all office space in the capital set to complete in 2020 is already pre-let or under offer.
These statistics follow the trend seen in 2019 when 84% of space completing across London was pre-let prior to completion.
This news follows on from the EGI article at the end of 2019 which reported that:
- the current vacancy rate of 4.9% in the City of London is the lowest since the winter of 2016
- City core offices saw rental growth of 5% in 2019
- on a London-wide basis, average headline office rents increased by 2% during 2019
Those of us acting in this sector will watch with interest to see how this shortage impacts upon the terms being sought by landlords and indeed by sellers of office buildings.
It was reported just before Christmas that McKay has sold its City office development, 30 Lombard Street EC3, for half a million over its asking price of £76.5m. This building was fully pre-let to St James Place Wealth Management in 2018 and the competition for space at that point was so fierce potential tenants went through a 'best bids' process.
“There is a supply issue; a lot of occupiers are struggling to find what they want, with core locations increasingly devoid of 50,000 sq ft plus product."