The tenancy of office properties in London rose in 2009 but has now dipped, according to quarterly statistics by property consultancy firm Drivers Jonas Deloitte (DJL).
Last year saw large leasing deals take place by firms such as Blackrock, which occupies 280,000 square foot at Drapers Gradens, and Macquarie Bank, which is tenanting 217,000 square foot at Ropemaker Place.
The two million square foot of office space taken up during the first quarter of this year can be attributed to the release of a ‘pent up’ demand by companies like Shell, which spent previous years planning and analysing their property needs before committing.
The increase was followed by a drop in take-up during the last three months where only 800,000 square feet of space was leased.
The report suggests that larger firms were waiting for the general election results and new budget to be unveiled before taking up work space, which may have contributed to the low numbers.
DJD say that the demand will stay at the same level for the rest of the summer but will be followed by structural demand from occupiers who will be dealing with lease breaks and expiries.
Some of this demand will be met through pre-lets on unfinished developments due to the lack of Grade A buildings in the city that are ready to move in to. For example, Bloomberg is currently discussing taking up 500,000 square feet of office space in EC4 in the Walbrook Square Scheme.
The Walbrook Scheme includes the construction of four office blocks that will create one million square feet of floorspace. A nearby new entrance to the London Underground Bank Station is also in the pipeline.