Growth, dominant note in the London office market
January 9, 2014
The hired office space in London from January to the end of the third quarter of 2013 (916.000 m2 / +71% YoY) and exceeds the volume of the entire year 2012, according to property consultant BNP Paribas Real Estate . The overall recruitment 2013 is expected to reach the highest level since 2010.
The demand for office space remains strong in all areas, not only in the City of London, and projecting activity sectors of information technology (38%), banking (16%) and professionals (21%) services.
The offer keeps a low profile and new projects do not involve sufficient area to prevent further upward pressure on rents.
During the third quarter, major operations were performed on existing supply after a period of strong pre-holiday activity. In the City, this trend has allowed the level of availability has dropped to its lowest level since 2010 (8.1% / -11% YoY).
With regard to investment, the volume of purchases in the third quarter amounted to 5,100 million euros, representing an increase of 76% quarterly and 85% annually. This is the highest quarterly volume of investment since the third quarter of 2007.
The last quarter was marked by the closure of large trades. Particularly noteworthy are two transactions (Shell Mex House and Paddington Central), which accounted for approximately 1,000 million euros between them.
International investment accounted for more than half of the turnover and increased in absolute terms. However lost market share against local investment, because last quarter was a recovery of British investment in London with British Land and Legal & General among those who have shaped the most significant transactions.
Yields 'prime' were stable in West End (4%) while decreased 0.25 points in the City as a result of demand pressure (4.5%).
