London’s Midtown market hits new highs
13 November 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)
Farebrother Head of Leasing & Development, Jules Hind, commented: “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.
Alastair Hilton, Farebrother’s Head of Investment, comments: “As our leasing statistics show, 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. Retail Leasing & Development Partner, Matt Martin, comments: “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.”