Financial service providers drive the London office space market
26 Jul, 2006, Frankfurt
Approximately 437,700m² of office space was leased in London over the last six months. According to Cushman & Wakefield (C&W), this means that leasing volumes are 40% higher than in the first half of 2005. In this period, financial service providers had a 39% share in these volumes and were the driving force behind the market (first half of 2005: 22%, first half of 2004: 22%). "The number of leases on the London office space market are considered to be the most significant indicator for the economic climate in Britain’s economic capital overall," say real estate advisers at C&W. "Moreover, the leasing activity in the financial services sector just goes to show that the most recent upheavals on the stock market have not had a negative impact on economic growth."
Public sector leased significantly less office space
Public organisations and authorities, on the other hand, leased significantly less space in
London in the first half of this year.
Decline in available office space – Developers encouraged
In addition to demand from the financial services sector, the office space market is also
being driven by the decline in office space availability. In London’s West End, 5.7% of office
space is currently available for lease – the lowest level since 2001. In the City and Docklands
area, this figure is 8.3% – the lowest it has been since 2002.
Lease prices on the rise
The record lease price of €131.50/gross/m²/month was reached in the first half of the year
at 25 Hanover Square, W1, and is thought to be the highest lease price ever to have been paid
for office space worldwide.
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