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Central London Office Take-Up Falls by Half

LONDON-Take-up in the central London office market was only 2.3m sf in the first half of 2003 according to the latest research from FPDSavills. This is 50% below the long-term trend, and more than a quarter lower than in 1992 which was the worst year of the last cycle

By Charlie Jacoby | Updated on July 08, 2003

LONDON-While there are signs that business confidence is starting to improve in central London, which may lead to increased activity in the second half of the year, it is unlikely to have an effect on supply of offices. That’s the conclusion of new research by FPDSavills, which reports that the 2.3 million sf take-up in the central London office market in the first half of 2003 is 50% below the long-term trend, and 27% lower than 1992, the worst year of the last cycle.

Although the central London vacancy rate has not hit its early 1990s peak of 17%, it continues to rise steadily, and now stands at 11.5%. The oversupply situation is most extreme in the City of London with 13.7 million sf of offices available, which equates to a vacancy rate of 16.9%.

Unsurprisingly, the low demand and increasing supply has led to further rental falls over the first six months of this year. While deal evidence is scarce, FPDSavills estimates that prime rents have fallen by 7% this year, on the back of the 20% falls last year.

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