W1, SW1, W2, SW3, SW7, W8, NW1
Key Headlines
Along with The Office’s Group’s deal at 210 Euston Road, NW1, G Research occupied three floors (18,921 sq ft) at 7 Swallow Place, W1 on a seven year lease at £83.00 per sq ft.
The Media Tech sector dominated leasing activity this quarter accounting for a 20% share in the West End so far this year, followed by the Professional Services sector (17%).
At the end of September, West End overall supply rose to 2.9m sq ft equating to a vacancy rate of 4.4%. This remains below the long-term quarterly average of 4.9%. Tenant-controlled supply increased in Q3 2020 and currently accounts for 29% of supply.
With a further fall back in development completions, 624,725 sq ft of developments are scheduled for completion this year in West End. 84% had already been pre-let.
Q3 West End Prime rent
Q3 2020 West End Vacancy rate
Q3 2020 West End Take-up
WC1 & WC2
As expected, take-up in Midtown was muted in Q3 2020 reaching 0.1m sq ft, bringing take-up to end September to 0.4m sq ft. This is 42% down on the same period last year and 67% down on the long-term average for take-up in Q1-Q3.
Hardwicke Chambers signed the largest deal of the quarter at 1 Gray’s Inn Road, WC1 acquiring the entire building (19,978 sq ft) on a 15 year lease, BNPPRE represented the landlord.
The Professional services sector accounted for the largest share of Midtown take-up this year at 20%, followed by the Services sector (18%).
The vacancy in Midtown reached 4.3%. This remains below the long-term average of 5.7%.
Construction delays have resulted in only 50,000 sq ft of office developments anticipated to reach completion this year in Midtown. The prime rent in Q3 2020 remains at £67.50/sq ft.
Q3 Midtown Prime rent
Q3 2020 Midtown Vacancy rate
Q3 2020 Midtown Take-up
E1, EC1. EC2, EC3, EC4
KEY HEADLINES
In comparison to other submarkets, the City saw steady take-up performance reaching 0.5m sq ft in Q3 2020 on par with Q2 levels. This brings 2020 take-up to 2.2m sq ft at the end of September. This is down 50% on the same period in 2019 (4.4m sq ft) and 50% below the long-term average for take-up in Q1 to Q3.
In addition to the Baker McKenzie’s deal, Q3 2020 saw JA Kemp commit to taking the entire building (37,867 sq ft) at The Stills, 76-86 Turnmill Street, EC1 on a 15 year lease.
The Professional services sector has dominated 2020 demand to date accounting for a 41% share of take-up in the City. The Banking & Finance and Media Tech sectors followed equally taking a 12% share.
A swift increase in tenant return space has resulted in a rise in supply standing at 7.0m sq ft, equating to a vacancy rate of 7.3%. This is above the long-term quarterly average of 7.2%. In Q3 prime rents fell to £70.00/sq ft, down on Q2 (£72.00/sq ft).
Q3 City Prime rent
Q3 2020 City Vacancy rate
Q3 2020 City Take-up
SE1
Southbank take-up totalled 32,000 sq ft in Q3 2020, down 70% on Q3 2019. This brings annual take-up levels to 0.2m sq ft, which is 61% below same period last year and 57% down on the long term average for take-up in Q1-Q3.
The largest deal recorded in Q3 was to Zwift UK (7,498 sq ft) occupying the ground and 1st floor at 150-152 Long Lane, SE1 on a 10 year lease. In addition to this, two deals were signed at London Television Centre, 60-72 Upper Ground, SE1 where Engage and Annapurna Recruitment signed on the 22nd (5,989 sq ft) and 9th (5,894 sq ft) floors respectively.
The Professional Services sector accounted for the largest share of take-up in Southbank at 30% followed by the Services sector (22%).
Following the trend, the vacancy rate in Southbank rose to 2.9%, up from 2.5% in the previous quarter. The long-term quarterly average is 4.6%.
Q3 Southbank Prime rent
Q3 2020 Southbank Vacancy rate
Q3 2020 Southbank Take-up
E14
Take-up levels in Docklands remained subdued reaching just 22,000 sq ft in Q3 2020, bringing 2020 total take-up to end September to 0.5m sq ft. This is down 51% on the same period last year (0.9m sq ft) and below the long-term average for take-up in Q1-Q3.
The only deal to complete this quarter in Docklands was to Anglia Ruskin University at 1 Clove Crescent, E14 on the 2nd floor (22,000 sq ft) signing a 9 year lease at £35.00/sq ft.
The Services sector continues to dominate Docklands take-up accounting for a 51% share largely attributed to BP’s deal last quarter. The public sector followed taking a 19% share.
Supply levels in Docklands rose to 2.3m sq ft in Q3 2020 up from 1.9m sq ft in Q3 2019. This equates to a vacancy rate of 12.4%, remaining above the long-term average of 8.5%. The Docklands still has the highest vacancy rate across Central London.
The prime rent in Q3 reached £47.50/sq ft, a fall on the previous quarter at £48.50/sq ft.
Q3 Canary Wharf Prime rent
Q3 2020 Docklands Vacancy rate
Q3 2020 Docklands Take-up