A new report by Cushman & Wakefield has revealed that leasing activity of commercial property in central London rose dramatically in the second quarter of 2013.
In the three months leading up to July, take-up of office space in central London stood at 2.3 million sq ft, which marks a nine per cent rise from the first three months of 2013. This means that in the first half of the year, just over 4.5 million sq ft has been let in the area, a 33 per cent rise from the 3.4 million sq ft let within the same period in 2012.
The report has suggested that many firms are snapping up office space quickly, due to industry fears that supply in the capital city is dwindling. With a supply shortage forecast over the next few years, businesses are trying to take advantage of the favourable market conditions. Andrew Parker, head of City agency at Cushman & Wakefield, said: “Leasing activity has been bolstered by the return of the preletting market, driven by an anticipation of future scarcity of supply."
The City performed strongest in the quarter, with 1.8 million sq ft of transactions. This is the highest quarterly figure seen for the City since the third quarter of 2007. Contrastingly, the West End, usually a favourite among buyers, only took up 510,000 sq ft in the three months. This is way below the quarterly average that has been seen since 2008. The report concludes that with limited supplies and high property values in the West End, more businesses are shifting east.
As these second quarterly figures suggest, it seems the commercial sector continues to be a safe bet for investors.