London sees and increase in office demand.
Q1 figures show a steady rise in office demand in the UK capital.
Figures released by real estate advisors Jones Lang LaSalle show that Central London office space has seen an 6 percent increase in demand during Q1 in 2011. This is a positive turnaround in comparison to figures seen throughout 2010.
The city market has seen an overall increase of 12 percent which is an increase of 7.8 million square feet of office space. In London’s West End demand has risen by 11 percent, which is around 4.3 million square feet.
However, some argue that even though demand has risen there is still a lack of quality office space in the UK capital.
“While the increased demand for London office space further demonstrates how strongly the market has recovered since the financial crisis, there is a growing imbalance between quality supply and increasing demand for Grade A space across London,” commented Jonathan Evans, head of Jones Lang LaSalle.
Prime rents in central London have stayed at £55 per square feet. However, the West End has seen office leasing prices go up to £92.50 which is an 4.5% increase.
In the City of London the banking and finance sector has taken up the biggest chunk of space leasing a total of 63,00 square feet, which is 33 percent of the total space leased.
“As a result of rising confidence in future rental growth, owners are increasingly seeking to retain exposure to London’s office market and this is limiting investment supply,” commented Damian Corbett, head of office markets at Jones Lang LaSalle.