New statistics have shown that it was the insurance sector that propped up the struggling London commercial property market last year.
Research from NB Real Estate revealed that 30% of all the City office lettings in Q4 of 2009 went to insurance companies. This equates to around 250,000 square feet of the total 860,000 square feet leased in the fourth quarter. It’s believed the insurance sector, who were one of the only industries to escape the recession practically unscathed, chose to take advantage of the low rents and available office space in 2009.
Recent major City lettings include R K Harrison Insurance Brokers’ deal to take 44,057 square feet at 1-7 Whittingham Avenue and Caitlin taking 115,000 square feet at 20 Gracechurch Street.
NB Real Estate have said that many firms took the chance to upgrade and work more efficiently, while quality office space rents remained low. At the height of the economic downturn, many landlords were forced into offering attractive rent-free periods as part of lease agreements in a bid to attract and keep hold of tenants.
“Relative to the terms that insurers and insurance brokers were having to agree for new space a few years ago current rents and incentives are seen by many as a steal,” said James Gillett, director of NB Real Estate City of London Agency. “Historically the space requirements of the insurance sector in the City have been lower than those of banks, but over the last year they have proved to be a vital prop to the market.”