Brexit fears yet to hit City occupier market
10th June 2016
Fears over a possible Brexit have
yet to dampen the City occupier market, with take-up rising 31% in the first
quarter of the year following a drop in activity at the end of 2015, according
to Gerald Eve research.
Financial services companies,
including traditional investment banks, wealth and asset management firms and
peer-to-peer lenders were the main drivers of lettings activity in the first
quarter, accounting for 37% of take-up, the research showed.
Technology, media & telecoms (19%) and
other corporate companies (12%) were the next most active sectors, followed by
serviced office providers, which remain key players in the city market,
accounting for 11% of take-up.
In total, 1.69m sq ft, across 244
floors, was taken up in the first quarter of 2016, an increase of 31% on Q4
2015 and 4% year on year.
Within the City market, the EC2
postcode was the main driver, accounting for 47% of all take-up.
Gerald Eve said there were no real signs of the impact of uncertainty ahead of the
EU referendum on the occupational market, although the deals
completed in Q1 were likely to have been finalised several months prior and
before the referendum date was set.
Continued strong demand saw prime
rents increase for the sixth consecutive quarter from £68/sq ft to £70/sq ft.
Several deals were agreed at or
above the £70/sq ft mark, including Quadrature Capital taking 10,672 sq ft at 122 Leadenhall
Street and Proskauer Rose’s letting of 5,012 sq ft at 110
Bishopsgate for £72.50/sq ft.
“Demand levels remain relatively
consistent and continue to put upward pressure on rents,” said Fergus Jagger,
partner at Gerald Eve.
“While there are downside risks
on the horizon, not least the uncertainty surrounding the EU referendum, we
expect demand for the year to finish broadly in line with 2015.”
In terms of supply, volumes rose
18% on the quarter to 2.66m sq ft, but were still down 10% on the year.
The rise was due to about 500,000
sq ft of new development coming to the market, with the amount of unrefurbished
stock only seeing a marginal increase.
If you are interested in office space in the City of London please call Gryphon Property Partners on 0203 440 9800 or click on the following link - City of London Offices