Demand for office space in London remained in quiet first quarter of 2016
Demand for office space in London remained robust through the traditionally quiet first quarter of 2016 with 3.1 million square feet leased by companies, a new report shows.
This was marginally below the 10 year average of 3.2 million but despite fears that economic headwinds and the possibility of the UK leaving the European Union could dampen demand, according to the analysis from global real estate advisor CBRE.
The largest deal in the first quarter of the year saw Thomson Reuters acquiring 315,400 square feet in Canada Square in the Docklands, lifting overall take-up for the quarter.
The data from the report also shows that the amount of office space currently under offer remains unchanged from the previous quarter at three million square feet, having been above the 10 year average of 2.8 million square feet since the beginning of 2014.
It explains that the development response has so far tracked demand, with supply increasing by 2% over the course of the quarter to stand at 12.2 million square feet, some 17% below the 10 year average.
‘Between a weak outlook for global economic growth and an upcoming vote on EU membership, businesses have had to contend with a heightened level of uncertainty,’ said Emma Crawford, head of Central London Leasing at CBRE.
‘That demand for office space has remained so resilient speaks volumes for London’s ongoing attractiveness as a global hub for those companies hoping to lay down roots or expand their footprint in the capital,’ she pointed out.
‘Whilst the high level of space under offer is particularly encouraging, we anticipate a more subdued second quarter as the referendum vote gets closer. We will be on course for a rebound in leasing activity in the second half of the year provided the UK votes to remain in the EU,’ she added.