City office take-up stays low

 
Kasmira Jefford
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THE TAKE-UP of new office space in London’s Square Mile this year could drop to its lowest since 2003 as economic uncertainty continues to dampen demand, property consultant Cushman & Wakefield has warned.

Research published by the firm today shows that leasing activity in the City and the Docklands rose more than 73 per cent in the third quarter of this year to 1.4m square feet compared with the previous quarter.

However, take-up – a measure of economic prosperity – for the year to date is still down 45 per cent compared with the same period last year.

“One strong quarter is not sufficient to call a recovery in the market,” Cushman & Wakefield said, predicting the annual take-up to be less than four million square feet -- a level not seen since 2003.

James Young, Head of Cushman & Wakefield’s City office, said: “Occupiers in general remain cautious and a number of decisions have been delayed. With the current economic uncertainty, 2012 will see take-up significantly below average.”

There were four deals larger than 50,000 square feet signed in the City and the Docklands in the third quarter. These were mainly lease re-gears and renewals including PWC signing on at Hay’s Galleria, at London Bridge.

Development in the City also remains constrained, with space under construction a million square feet below the five-year average, Cushman and Wakefield said.