According to DTZ, it is expected that rental growth in central London will hit double figures this year due to high demand and an under supplied market.
Total availability in the office market has fallen by 27 per cent over the past year to 9.7 million sq ft, while the supply of new and refurbished office space dropped by 21 per cent to 4.6 million sq ft. Take-up in January was 706,000 sq ft, which matches the figure for the same time last year.
A number of large transactions were completed in January, with the largest being Hewlett Packard which took 65,000 sq ft at 1 Aldermanbury. Others deals completed include Aimia, who took 40,000 sq ft at 80 Strand, and The Office Group, who took 34,000 sq ft at 2 Stephen Street.
Senior analyst Central London Agency & Investment at DTZ, Sophy Moffat, said that despite a stable January, availability remains restricted, adding “The tightening of supply is likely to continue with just three buildings offering over 200,000 sq ft at present- The Shard, Aldgate Tower and Moorgate Exchange-while there are also significant spaces currently under offer, including 145,000 sq ft in Becket House, SE1.
“Increased competition for space is likely to result in double digit rental growth across various submarkets this year. We expect an uplift of 10% in the city and 11% in both the Docklands and Midtown”.
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