With Media Tech firms holding confidence ahead of the upcoming exit from the EU, the largest deal to complete in Q4 2019 saw Apple acquire 156,442 sq ft (31th – 36th) at 22 Bishopsgate, EC2. The tallest building in the City is now approximately 60% pre-let prior to completion in the first quarter. Consequently, this deal contributed to the Media Tech sector dominating 2019 demand, accounting for a 19% share on par with the sectors share in 2018.
The biggest concerns facing Media Tech firms continues to be attracting and retaining talent with worries Brexit will make hiring more difficult. However if a points-based immigration system is introduced under a conservative parliament, this should be beneficial in reinforcing the UK as the leading tech hub. The Banking & Finance sector has also retained its presence in Central London since the EU referendum. In 2019 this sector accounted for a 16% share, up from 12% in 2018.
New developments set to complete in Q1 2020, including Lloyd’s Chambers, 1 Portsoken Street, E1 and EightyFen, 80 Fenchurch Street, EC3 contributed to a marginal increase in supply figures standing at 12.8m sq ft in Q4 2019. This is a rise from 12.3m sq ft in Q3 2019 equating to a vacancy rate of 5.7%, which is up on 2018 (5.0%) but remains well below the LT average (6.7%). This has resulted in prime rental growth across several submarkets including Southbank where rents stand at £70.00/sq ft, reflecting annual growth of 7.7%.
In 2019 8.2m sq ft of office developments reached completion. Going forward newly developed and refurbished stock remains limited, of the 7.7m sq ft due to be developed in 2020, 50% is pre-let.