West End Offices - Q3 - 2009
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There were reasons to feel more positive about the West End office
market at the end of Q3 and looking forward there is certainly light at
the end of the tunnel. In spite of a healthy increase in the number
of deals in Q3, we are still on track for one of the worst years of
take-upon record with just 109,650m² (1.2 million ft²) of lettings to
date - due to poor Q1 and Q2 figures - against a 25-year annual average
of 363,000m² (3.9 million ft²). The volume of activity in Q3 suggests
that demand has begun a sustained return, with availability decreasing
for the first time since Q2 2007. It is unclear, however, how much of
space currently under offer will translate into take-up before the year
end. |
Added confidence can be taken from active requirements increasing by 19% at the beginning of the autumn. With a limited development pipeline, especially in Mayfair and St James’s, it seems that rental growth may be seen earlier than predicted, assuming the economic recovery remains on track. With rents and incentives finally hitting the bottom, tenants are becoming aware that the next few months may be the cheapest time to move before the next upwards cycle.
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