Demand for office space in London is up 76 per cent on last year

The Square Mile - London's Financial District
The City saw particularly strong demand for office space (Source: Getty)

Demand for office space in London is up by 76 per cent year-on-year, new data has shown.

According to data from real estate firm CBRE, office space under offer in Central London rose by three percent last month to 3.7m square feet (sq ft).

This stood ahead of the 10 year average of 2.8m sq ft and equated to a year-on-year increase of 76 per cent.

Take up, the amount of space absorbed by the market, increased by 20 per cent in February to hit 0.6m sq ft.

Read more: Square Mile success: City offices to enjoy bumper demand in 2018

Head of City leasing at CBRE Chris Vydra said that the real estate market in the City remains especially strong.

“Demand for office space in the City remains robust. The level of under offers in the City reached 1.4m sq ft in February, accounting for 38 per cent of the Central London total," he said.

The largest transaction last month was Sumitomo Mitsui Banking Corporation’s acquisition of 161,200 sq ft at 100 Liverpool Street in EC2.

The banking sector saw the largest proportion of take-up in February at 40 per cent, followed by the creative industries at 23 per cent and the consumer and leisure sector at 14 per cent.

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Eversheds Sutherland City real estate partner Nick Bartlett said that demand, particularly for high-quality office space, remained high.

“The market feels quite buoyant, there is a lot of demand from both occupiers and would be purchasers. The buildings we have been involved in have been recently constructed by investors, leased up very quickly by occupiers and sold on to long-term investors. It feels like there is quite a lot of movement in the market and deals are being done.”

CBRE previously predicted that 2018 would be a bumper year for City office take-up with businesses expected to lease more than 5m sq ft over the course of the year.

It said that Brexit has had a minimal impact on financial and insurance firms’ appetite for office space in the City. It also predicted that demand for co-working space would continue to boost-office take-up in the Square Mile this year.

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