According to a report from BNP Paribas Real Estate, Central London has seen one of the biggest declines in office vacancy rates since the year 2000.
In regards to take-up, during the fourth quarter of last year, 4.49m sq ft of leasing was recorded, giving a total for 2014 of 16.03m sq ft.
The report shows that TMT occupiers dominated the market, with a 24 per cent share of annual take-up and a 31 per cent share in the final quarter.
Serviced office operators also helped to drive demand, with the sector responsible for 1.2m sq ft of annual take-up, a total of 7 per cent.
Supply has fallen across all the central London markets leading to one of the lowest vacancy rates ever recorded, at just 5.1 per cent.
The 6.25 per cent vacancy rate in the City is the lowest since 2008. In Midtown it was 4.8 per cent, while in the West End and Southbank markets the figure was 3.6 per cent. Take-up in Docklands was the highest since 2010, leading to a fall in the vacancy rate to 7.31 per cent.
Further falls in vacancy rates are expected throughout this year with rental growth increasing in most submarkets.
Steven Skinner, the head of West End investment at the BNP Paribas Real Estate, said in a statement “The London office market continues to go from strength to strength”
“The combination of volatility in other asset classes and historically low yields in sovereign-bond markets should ensure that capital continues to flow into the London market”.
Story: Chris Grigorovsky
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