City of London leads surge in office demand

• Largest quarterly take-up since Q2 2007 and 4th largest on record
• Record quarterly take-up in London, but rest of UK below average
• Financial and Business Service sectors recover strongly

A total of 3 million ft² of office floorspace wasacquired in Q1 2010, up 23% on Q4 2009 and 178% higher than the same period a year ago (chart 1). This was the largest quarterly take-uprecorded since Q2 2007 and the 4th highest on record. A total of 58 significant* deals wererecorded, a fall of 8% on Q4 2009, but an increase of 45% on the corresponding quarter last year.In the year to March, take-up was 44% higher than the previous 12 months, though the number of deals decreased by around 7%. The average deal size continued to rise, to around 47,000 ft², up from30,000 ft² in the preceding year. Whilst encouraging, there is a concern that take-up is becoming reliant on a small number of large deals in London.

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