Property News Grade A availability in the West End falls by 20%

West End Offices

Colliers International’s Central London Offices Report for Q1 2011 has shown that Grade A availability in the West End fell by 20% quarter on quarter with a further 335,000 sq ft under offer.

Take-up saw a significant fall across the whole of the Central London market in Q1 2011. The main instigators of the fall in transaction levels were the City and Docklands submarkets, where quarter on quarter take-up fell by 47%. In contrast, the West End and Southbank markets  experienced their highest quarterly take-up for over three years. 
Guy Grantham, Director of Research and Forecasting at Colliers International commented: “The squeeze on Grade A supply is becoming more pronounced across Central London. However, total Grade A transactions for built space fell by 25% quarter on quarter, underlining the reduction in ready-to-occupy top quality office product.”

Central London total availability fell by a further 4% in Q1 2011. New and refurbished space rose slightly off the back of major completions in the City at Heron Tower and 200 Aldersgate
Street. In contrast, West End availability of new and refurbished accommodation has now fallen by 30% in the past nine months and the Southbank market has seen a fall of 36% over the same period.

Guy added: “A shortage of new supply is beginning to impact upon take-up levels, despite the temporary rises seen in the West End market. This trend is likely to become more apparent as 2011 progresses. Total development completions for the remainder of 2011 across all of Central London are expected to total 792,000 sq ft. This figure compares to a total of 2.9 million sq ft in the final three quarters of 2010, down by nearly two thirds.

“Low vacancy in the West End is set to have a significant impact upon latent demand from occupiers who might relocate if opportunities existed. In the City market, demand is being dictated more by tenant inertia and global influences but large lettings could easily change the whole tone of a single quarters statistics. The Colliers report also revealed that the West End market has seen average headline rents climb by 5% in the first three months of 2011. The average Central London figure continued its upward curve to stand at £46.78 psf, equating to an annual rise of 7.1% but this accommodates a wide range of top West End rents.”