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Momentum in London Leasing Market Continues – Supported By East London

Leasing activity in the first half of the year totalled just over 6.26 million sq ft— according to research published today by global real estate adviser Cushman & Wakefield (C&W). This is 13% ahead of the same point in 2014 when 5.6 million sq ft was transacted and is the highest Central London first half total since 1998, when 6.7 million sq ft was let.

Lettings in Q2 reached 3.3 million sq ft, increasing quarter on quarter and significantly above the 10 year quarterly average of 2.5 million sq ft.  There was a significant upturn in activity in East London, with 1.2 million sq ft let, only marginally behind the City market (1.24 million sq ft) and significantly ahead of West End volumes (915,000 sq ft).  East London take-up was at its highest level since Q4 2010 and this boost in activity was as a result of three transactions over 100,000 sq ft signing- FCA (425,000 sq ft at TIQ, Stratford), TFL (250,000 sq ft at TIQ Stratford) and Deutsche Bank (389,000 sq ft at 10 Upper Bank Street, Canary Wharf).  

Elaine Rossall, C&W’s head of London Markets research, said: “This quarter the focus of leasing activity has all been in East London, as occupiers seek good quality cost effective space and are buying into the positive benefit of Crossrail.  Canary Wharf, in particular, has moved from double digit vacancy rates just 12 months ago to one where the vacancy rate is now on a par with the City. ”

Preletting activity returned to the market in Q2, with over 1.0 million sq ft of prelets signed this quarter or 31% of total volumes.  As well as the two TIQ transactions, the other major prelet was a further 190,000 sq ft transaction to Google at Kings Cross, which brings their commitment to the area to 1.3 million sq ft.

Andy Tyler, C&W’s head of West End office agency said “With the Central London vacancy rate falling to 5.0% over the quarter,- the lowest level since 2008- preletting is anticipated to remain a key feature of the lettings market in the coming months as occupiers, particularly those with larger requirements are increasingly  frustrated in their search for space.”

The leasing market continues to be more balanced in terms of sectors, with banking & financial services occupiers most active this quarter.  As well as the transaction to Deutsche Bank, we have also seen a flurry of banking & financial services deals in the 20-50,000 sq ft range, including Commonwealth Bank of Australia, HSBC and PJT Partners.  

Prime rents continue to rise, with average rental growth of 8% evidenced across Central London in the year to June, with rents in the City and the East London outperforming.   Prime rents in the City now stand at £64.50 per sq ft and in the West End at £125 per sq ft.  With supply expected to contract further during the remainder of the year, C&W expect rental growth to pick up in the latter part of the 2015. 

Andrew Parker, C&W’s head of City of London office agency, said: “We are increasingly observing rents achieved in the £70s for upper floors and terraces in non-tower space. This willingness of occupiers to pay above prime rents, reflects increasing occupier confidence in the market place.”

City & EAST LONDON – q2 2015 top 5 transactions by size


SQ ft




International Quarter Building 5

Deutsche Bank


10 Upper Bank Street



International Quarter Building 6



The Leadenhall Building, 122 Leadenhall Street

We Work


Aldgate Tower, 10 Whitechapel High Street

CITY  & EAST LONDON – q2 2015 top 5 transactions by RENT


SQ ft


Rent Per SQ Ft

Banco Sabadell


The Leadenhall Building, 122 Leadenhall Street




The Leadenhall Building, 122 Leadenhall Street




100 Cheapside




125 Wood Street




The Steward Building, 27-33 Artillery Lane


west end – q2 2015 top 5 transactions by size


SQ ft




Kings Cross Central Building S2



The Adelphi, 1-11 John Adam Street

Development Securities


7 Howick Place

PJT Partners


1 Curzon Street



116 Park Street

west end – q2 2015 top 5 transactions by RENT


SQ ft


Rent Per SQ Ft

PJT Partners


1 Curzon Street




12 Golden Square


Thunderbird Partners


110 Park Street


Waverton Investment Management


16 Babmaes Street


Allfunds Bank


2 Fitzroy Place, Mortimer Street