City of London office take-up rises after landmark Square Mile deals such as Chinese embassy move | City A.M.
Take-up of offices in the Square Mile jumped 10 per cent over the last year, as demand for City of London commercial space shows no sign of slowing down.
In the 12 months to June roughly 3.5m square feet was taken up in London’s financial district, rising 31 per cent higher than the 10-year average for the area.
The City “core” accounted for the vast amount of take-up, with 68 per cent of acquisitions taking place within its borders so far this year, while demand for “fringe” areas of the City tailed off, according to Savills.
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Such a gap between the inner and outer parts of the City has pushed the two areas to their widest difference in rental prices since 2014.
Landmark deals such as the Chinese embassy move to the Royal Mint Court has also driven the rise in the City’s occupier base over the last few months, according to Savills.
Government, health and education sectors accounted for the greatest proportion of take-up this year at 19 per cent.
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Meanwhile, serviced office providers have accounted for nine per cent of take-up so far this year, compared with their 18 per cent share for the same time period one year ago.
Philip Pearce, head of the central London office agency team at Savills, comments: “The City leasing market has got off to a strong start in 2018, and the diversity of occupiers and requirements in the marketplace signals a positive second half of the year ahead.”
Recent CBRE figures also showed that the value of City of London offices jumped to £3.6bn in the second quarter of this year, reaching a peak since CBRE began records 28 years ago.
The elevated level of activity was led by the £1 billion sale of UBS headquarters at 5 Broadgate to Hong Kong-based investor CK Asset Holdings, according to the CBRE, which pointed out that it was the third £1bn-plus building to sell in the last 18 months.