London City has lower availability of Grade A office space than West End

London City’s “undersupply” of office availability has increased due to the rising demands for office spaces, with businesses already taking up 6.5 million square feet in capital for this year.

There is both good and bad news, with development activity increasing, but continually outpacing the supply in the short term.

The shortage of office space is not limited to London City, but is London-wide. The City and Docklands have large-scale projects like the Leadenhall Building, the Walkie Talkie and the HSBC Tower. Now the Grade A vacancy rate in these markets is now lower than in the West End, when, traditionally, the space in the West End has been at a premium.

The options for corporates seeking London headquarters are declining. The amount of space available has fallen by an average of 2.3 million square feet per year for the past six years. Availability of new and newly refurbished offices has fallen more than 40% in within the last 12 months.

Now there is just 3.4 million square feet of high-quality office space available. “There are currently around 15 businesses, mostly in tech, media and finance industries, actively searching for more than 100,000 square feet—and there are just six buildings that offer that space,” said Alistair Brown, Senior Director at DTZ. Because of all the supply and demand, he expects, “prime rents in the City and West End to increase by more that 10% this year.”

Brown also believes that the competition for the best quality space will intensify from businesses in London wanting to improve their headquarters. Occupiers have been more active in other submarkets, including King’s Cross and Docklands, with German banking giant, Deutsche Bank, taking 390,000 square feet at Upper Bank Street in Canary Wharf last month.

Finding and negotiating office space rental in London often has its pitfalls which can easily avoided by speaking to a team of professional surveyors. The five partners at Gryphon have over 100 years experience between them in the London commercial property market.  They can guide you through the process from beginning to end and help you to find the perfect office space in London for your business to flourish.  To discuss office space to let  please call us today on 020 3440 9800.