Take-up of office space in the capital has seemingly bounced back after pre-referendum dip, with leases up by 24% in July, equating to 980,400 sq ft.
The rise of almost a quarter (24%) sees the strongest monthly average since March this year, according to CBRE.
Demand for central London office space was boosted by three deals of over 50,000 sq ft in July, including a major move by Wells Fargo for 220,700 sq ft of space. The banking and finance sector accounted for 31% of take-up in July, followed by businesses services sector (22%) and creative industries (17%).
This increased appetite for London offices has widely been seen as a vote of confidence after the referendum result to leave the EU, particularly from the banking and finance sector.
To put this into a wider context, the July surge in office take-up remained below the 10-year average of 1.1m sq foot per month, yet above-trend leasing activity in the City and Southbank suggests that the capital is still perceived as an attractive and viable location.
Office space under offer fell by 14% over the course of the month to stand at 3m sq ft as a number of large deals completed. However, this remains 7% above the 10-year average of 2.8m sq ft; another indicator of strong demand.
Emma Crawford, head of London leasing at CBRE remarks:
“Much has been said about the health of the London office market this year, but clearly demand for office space remains buoyant. Businesses are still confident about London’s significant advantages as a global business centre, even when the UK is outside the EU…Of course the jump in leasing activity is good news for the market, and whilst this is not universal across all sub-sectors of the London market, even with heightened economic and political uncertainty, longer term prospects remain promising.”
This news also echoes recent reports that jobs in the capital aren’t as ‘aggressively’ affected as expected post-referendum. As the capital looks to its post-Brexit future, the question raised becomes will these positive trends continue.