23 July 2016 – by Alexander Peace
The London office market saw one of its worst quarters for seven years in the run up to the referendum as tenants shied away from taking large spaces, EGi research has found.
For the first time since 2009 , there were no deals of more than 100,000 sq ft completed in a quarter, only three above 50,000 sq ft – the lowest since 2011 – and only one above 80,000 sq ft.
According to London Office Markets Analysis, just 2m sq ft was let overall in Q2, a 44% decline on Q2 2015, and a 34.1% fall on Q1 this year.
David Hanrahan, co-head of London offices at Colliers International, said: “With that decision hanging out there, a lot of people were waiting to see the outcome.
“If you did not have to, you did not make a decision.”
All the content from this weekís magazine, including this article, is available in the new app.
Q2 take-up in the City market fell by 52% year-on-year and by 32% in the West End.
Stephen Down, head of central London at Savills, said: “There has been a slowdown in the past 12 months, as the cycle has matured, which has been exaggerated by the lead up to the referendum.
“The vote coincided with a slow point in the year, and I expect this will exaggerate the take-up levels in Q3.”
Investment volumes continued to decline during the period. Some £3.3bn was spent on London offices in the second quarter, 31% less than in the same period last year, and a two-year low.
In the first six months of the year, investment levels across London have totalled £6.8bn, compared with £9.7bn in H1 2015.
