Take-up of Central London office space surged last month, with demand from the UK’s creative sector helping to drive growth in the capital’s commercial property market.
Roughly 1.3m square feet (sq ft) of office space was let in October, marking a 30 per cent rise on the same month last year, according to new data from real estate advisor CBRE.
Firms committing to new office space before construction has finished also soared, with pre-letting activity hitting a five-year high in the year-to-date.
Appetite for new space largely came from London’s creative sector, which accounted for nearly 20 per cent of all deals that were signed in October.
The largest deal of the month saw US ad agency McCann Erickson take 146,400 sq ft at 135 Bishopsgate in the Square Mile’s eastern cluster.
Such figures underline the growing demand among advertising and fintech firms for more space in Central London during the last 12 months, with many moving closer to the City in a bid to help boost their financial expansion.
“October saw another strong month of take-up,” according to James Nicholson, head of City occupier advisory & transaction at CBRE.
Nicholson said: “One notable feature of the market is the increase in pre-letting activity, reaching a five-year high with 3m sq ft of deals so far this year. This has further depleted the development pipeline, with 52 per cent of all space under construction already let or under offer.”
Fresh evidence of the rising demand for flexible office space also emerged, with the sector taking 122,300 sq ft of space during the month, bringing the proportion of take-up represented by the flexible office sector in the last 12 months to 19 per cent.