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London Midtown Office & Retail Markets

Our extensive research provides a detailed and often unique insight into office and retail markets in London Midtown. In conjunction with Union Street Partners, we also focus on the London South Bank commercial property market.

In Midtown, we track quarterly take-up, availability, future supply and investment activity in WC1, WC2, part EC1 and part EC4 for two property cycles. Our research is backed by the insights of our highly experienced property professionals and is considered among the most reliable and focused for this market.

Our quarterly reports are published alongside our annual 'Centre of London' research, which monitors the area running from the top of Midtown’s northern border at King’s Cross through to the South Bank, and our bi-annual Midtown Retail Bulletin, which provides a detailed insight into the exciting retail and leisure changes in this continually evolving market.

Latest Research

LONDON SOUTH BANK OFFICE & RETAIL MARKETS Q3 2018

London’s Midtown has recorded the highest take-up of office space in a single quarter since 2013.  In Q3 of this year, office take-up totalled 900,454 sq ft - 43% up on the previous quarter. It marked the highest level of take-up since Q3 of 2013, and was well above the 10-year quarterly average of 660,583 sq ft.  Key lettings during Q3 included:

LinkedIn taking 82,910 sq ft at The Ray Building on Farringdon Road
WeWork at 1 Waterhouse Square (74,948 sq ft)
Live Nation at The Farmiloe Building (64,777 sq ft)
Gaming Technology Solutions at MidCity Pace (53,349 sq ft)

Midtown is now the chosen office location for a broad range of businesses from professional services to tech, creative and finance. It’s a maturing, vibrant core London office market.  Occupiers are drawn to Midtown because it’s at the very centre of London. It has great transport connectivity, diverse amenities and a transforming public realm. However, there is now a real risk of the market stalling owing to lack of supply.  The low levels of high quality space will offer some significant challenges to our market in 2019 and beyond, as there is not - yet - any significant change in the future pipeline.

The Midtown investment market saw a similarly buoyant level of activity during Q3. Driven by the £1.2bn acquisition of Goldman Sachs’ HQ by Korea’s National Pension Service, the quarter registered £2.6bn of investment transactions – an all-time-high.  The Midtown occupational market is performing ahead of expectation, and this is correlating strongly with the investment market. An exceptional Q3 accounted for 60% of the years turnover and brought transactional activity for the year to date to £4.3bn which is already well in excess of the total for the whole of 2017.  Overseas buyers still dominate, but there has been some opportunistic buying by domestic investors. It’s clear that some buyers are more concerned about the impact of Brexit than others.

In the retail and restaurant market, the gradual transformation of Midtown continues. Occupational demand remains steady despite market challenges and uncertainty.  Take-up of space is driven mostly by food and beverage uses but there is demand across the use classes for the right space.

The London Midtown Office & Retail Markets Q2 2018

Office take-up across London’s Midtown rose by 43% in the second quarter of the year as the market experienced steady demand and declining supply.  Just over 631,000 sq ft of offices were leased in Q2 which was a significant uplift on Q1 and meant that 1.1m sq ft of Midtown space has been let in the year to date.  There is steady demand across the market and a vacancy rate of only 3.4%. This level of vacancy equates to around 1.5m sq ft - well below the long-term average of 2.5m sq ft.  The current speculative construction pipeline is only 1.1m sq ft but occupier’s appetite for high quality space is clear; over half the space let in Q2 was new or refurbished space.  Farebrother are monitoring over 560,000 sq ft of space which is currently under offer which should mean that these trends continue through to the end of the year.

Occupier enthusiasm for Midtown was matched in Q2 by investors. The three months between April and June saw investment transactions reach £1.2bn which brought the half year total to £1.67bn. This is the second highest H1 volume since the market saw £1.75bn of deals transacted in the first half of 2014.  In line with the rest of London, international capital is still the dominant factor. During Q2, overseas investors accounted for 85% of total turnover.

The Midtown retail and leisure sector is still seeing strong levels of occupational demand, albeit a higher level of flexibility and creativity is often required to attract occupiers. There is definately a positive outlook beyond this temporary period of unrest, but change is vital to this process.  The second Grimsey Review has gone some way to map out what needs to change, but delivering this vision will very much depend on political will - at a time when the Government already has a lot on its plate.

Previous Research

Research Seminars

Farebrother regularly contribute to and host events, receptions, presentations and round table discussions focused on the Centre of London for investors, developers, occupiers and managers. Please contact Adrienne Kearney for further details.