THE CITY of London had its busiest quarter for office lettings in 14 years this summer, according to figures published yesterday.
Just over 2.7m sq ft of office space was transacted in the City during the period, the highest level since the turn of the century, according to BNP Paribas Real Estate. The busy period took the volume of transactions in the Square Mile during the first three quarters of 2014 to 5.54m sq ft, just shy of last year’s total for the same period. BNP predicts that the overall cost of renting prime London office space will have risen by seven per cent this year, due to high demand and low supply.
Office take up in central London during the quarter was 36 per cent higher, with 4.84m sq ft of deals signed across the capital.
BNP Paribas Real Estate’s head of central London Dan Bayley, said: “Supply across the capital’s core markets fell by a further 10 per cent during the third quarter and now stood at 13.49m sq ft and the vacancy rate for central London offices of 6.11 per cent was the lowest recorded since 2008 and a substantial 147 percentage points below the 10-year average,” he said. “With limited development completions forecast over 2015 and the continuation of strong occupier demand we foresee an impending supply crunch that should put further upward pressure on rents.”