Central London office availability ‘falls further’

The volume of available office space in central London is now 48% off the 2009 peak, according to new data from Deloitte Real Estate.

The past 12 months have seen a 14% dip in the amount of space which is available to rent in the capital’s office market, the business advisory group said.

It is now six years since the amount of available office space in central London last stood at such a low level, the firm’s end-of-year statistics indicate.

Victoria sees greatest reduction

Looking at the West End office market in particular, Deloitte Real Estate said the largest drop in space has been witnessed in the Victoria area.

The volume of available office space in this part of the capital has fallen by 46% over the last year.

Weaker fall in City office space

The research shows that a less pronounced decrease has been witnessed in the City of London during the past 12 months.

Over the course of 2014, it is thought that the total amount of available office space remained close to the five million sq ft mark in the City.

The amount of space on offer in the City is still at its lowest point in seven years, however.

Deloitte Real Estate reported that the City saw more than three million sq ft of space become available last year, thanks to the completion of major office construction schemes.

Declining availability

Commenting on the findings, Chris Lewis, head of tenant representation at Deloitte Real Estate, said the vacancy rate in the West End has fallen below the 4% mark. He described this figure as “critically low”.

Mr Lewis added that the amount of available office space fell across all of central London’s core markets last year.

Rental growth predicted

Looking to the future, the expert said that a “limited development pipeline” is likely to combine with “strong occupational demand” over the course of this year.

He concluded: “We anticipate 6.3% rental growth in the City and 8.7% in the West End over the next 12 months on prime Grade A buildings.

“In some areas where we are seeing very low levels of available space, we could see pockets of super-growth.”

--------------------------------------------------------------------------------------------------

Copyright Press Association 2015