LONDON-Central London saw a surge in office availability during the third quarter of 2001, with vacancies rising from 2.7% to 4.1% in just three months, according to Healey & Baker, the EMEA arm of Cushman & Wakefield. And rents in the key West End market have started to fall, say the agents.
The Healey & Baker report points out that despite an increase in supply, the stock of Grade A space is still limited, and availability is still significantly below the average over the past ten years. And despite a 28% slump in identified requirements over the quarter, office demand is still running ahead of the ten-year average.
Across London as a whole, the financial and banking sector still has the biggest requirement for office space, although in the City lawyers are now the biggest takers of space. In the West End, the media and marketing sectors are the most active.
Take-up in the quarter totalled 2.23 million sf, down by 25% on the second quarter, although that quarter’s figure was inflated by just one deal: Barclay’s Bank’s one million-sf acquisition at Canary Wharf. And by the end of the quarter 8.8 million sf of office space was available.
Reflecting this weakening market backdrop, prime rents in the City remained static at £65 per sf while prime levels in the West End fell back from £85 ($122) to £80 ($115) per sf.