Increase in Greater London office space lettings for Q2 2009
Following the conclusion of the first half of 2009, we analysed the number of lettings made through officebroker.com between January and June 2009 for office space in Greater London. The results show that the second quarter was up by 8% over Q1 – a result that throws positive light over the current difficulties of the office space and commercial property market.
This recent report shows that some areas of the UK are not only holding onto their early 2009 figures, but are also beginning to show marked improvement by the completion of Q2. Greater London is currently performing well, along with the South-West and Wales, which are also showing an increase for lettings in Q2 over Q1.
The below graph shows the percentage of office space lettings for the Greater London region, with a comparison between the first and second quarter of 2009.
Our news of Greater London’s recent achievement comes at a time when London’s commercial property market has allegedly started to bounce back from the downturn. According to a recent report by real estate advisors Cushman & Wakefield, sales and investment of commercial property in London experienced a 110% increase in Q2 when compared with Q1.
This surge over the second quarter of 2009 represents the first time in two years that sales in the market have increased – a positive sign for the industry.
David Erwin, head of UK capital Markets for Cushman & Wakefield, said: “There is no doubt we are experiencing a mini revival in the fortunes of the investment market, with yields hardening across several sectors and a surplus of buyers over sellers.” Mr Erwin goes on to add, “The London market is leading the way.”
Part of the improvement has been attributed to the weakening of the pound against other currencies, including the dollar and the euro. International investors are now seeing parts of London in a new light, as the city’s value for money becomes apparent.
A recent investigation by Knight Frank at the conclusion of Q2 finds London favorable in the second quarter over the first – specifically in the M25 region. While investment activity as a whole in Q2 reportedly tripled, the commercial property market also received a positive boost from the increase. Speaking to Property Week, Emma Goodford, head of South East office space leasing at Knight Frank, said:
“Encouragingly, whilst take-up appears to be at or near to the bottom of the cycle, the number of requirements and inspections has picked up notably in the last few weeks, as tenants are now a little more confident of the future.” She also added, “As growth returns in the economy, we expect that those towns currently undersupplied with high quality space will see net effective rental levels moving up once again.”
According to officebroker.com letting figures for 2009, the areas that showed the most improvement in Q2 over Q1 include Enfield, Sutton, Bromley, and more central regions including the London W postcode area. These regions also enjoyed a significant increase in enquiry figures for the second quarter, particularly Sutton, which saw enquiry levels triple from Q1 to Q2.
Based in the South East of London within the M25 motorway network, the town of Sutton occupies a prime spot with excellent transport facilities, thanks to the town’s proximity to the capital and easy access by train and tube. In addition, transport in Sutton has recently received a major boost, following the council’s success in a greener travel initiative that earned national recognition. Sutton Council has kicked off a ┬ú5million, three-year partnership with TfL, which aims to reduce car use and promote sustainable travel in the borough. The scheme won the Sustainable Transport Strategy prize at the Municipal Journal Awards.
Stephen Preston, officebroker.com consultant for the Greater London region, says that recent demand for Greater London is partly due to the Olympic Games, and regeneration that arises as a result of this. Also, the outer regions of London are typically more inexpensive than the central areas.
“Being in Greater London means that rates are lower than that of Central London, but means companies are still close to the heart of business.”
He adds, “Greater London provides easy access to all parts of the UK, perfect for companies opening offices in London from outside of the area who want easy access to the M25.”
Stephen also brings attention to the fact that there are larger and more open plan office spaces than in Central London, often providing a more pleasant working area for tenants.
For more details on office space in Greater London, go to officebroker.com to find and compare offices in the region. For advice relating to location, or to get help securing an office, speak to one of our experts for free, no-obligation guidance and support.