Take-up for November reached 267,068 sq ft across 25 transactions, which boosted year-to-date take-up to 3.8m sq ft. However, this is down 16% on the same period over 2018 and 19% on 2017, years where we saw record levels of take-up.

Whilst pre-lets have continued to drive leasing activity and have accounted for over 1m sq ft of space let, there have been no pre-lets over 150,000 sq ft. This is in contrast to 2017 and 2018 where transactions of this size boosted take-up by 827,337 sq ft and 595,000 sq ft respectively.

Despite this take-up still remains above the 10-year long-term average of 3.5m sq ft by 8% and we expect take-up will reach 4.2m sq ft by the end of December, which is in line with take-up levels we saw over 2016. With demand continuing to remain strong, we are anticipating take-up over 2020 will also be up on the long-term average.

The largest transaction we saw complete in November was to London Transport Museum who acquired TFL’s sublease of the entire building at Albany House, 84 Petty France, SW1, (60,469 sq ft).

The Tech and Media sector continues to be the key driver of demand across the West End and has accounted for 25% of space let this year, followed by the Insurance & Financial sector with 21%. The serviced office provider sector has continued to boost leasing activity and has so far accounted for 19% of take-up which equates to 649,335 sq ft.

Underlying demand continues to remain robust with space under offer at 1.7m sq ft, up 12% on the average amount we have seen over the past two years.

Central London and West End requirements currently stand at 5m sq ft. The Tech & Media sector accounts for the largest proportion of this total at 30%, followed by the Insurance & Financial sector with 20%.

This year we have seen 2.3m sq ft of new developments and extensive refurbishments complete which is down on the 2.9m sq ft we predicted would complete at the start of the year. In total, around 80% of this space let prior to completion.

Supply has remained at the same level for the third consecutive month with 4.5m sq ft available, equating to a vacancy rate of 4.0%. We could potentially see supply rise at the start of next year to 4.4%, if 250,000 sq ft of tenant space from Pearson at 80 Strand, WC2 is released in Q2 2020 in addition to the 180,000 sq ft of speculative space in the development pipeline scheduled for the first half of 2020.

If the vacancy rate rises to 4.4% over the next year, this would be the highest vacancy rate we have seen since April 2011, with the long-term average vacancy rate at 4.2%. However, there still will be no risk of oversupply with this increase as supply would equate to around 14 months’ worth of take-up at the rate we have seen over the last 10 years, well below the 20 months oversupply mark.

The average prime rent achieved so far this year currently stands at £119.64 per sq ft, which is up 13% on the previous year, whilst the average Grade A rent currently stands at £79.18 per sq ft, up 3% on 2018’s £76.81 per sq ft.

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