Take-up is 16% up on this point last year - could we see a new record year?

■ Take-up for June was 806,612 sq ft in 43 transactions, bringing the year-to-date take-up to 3,850,269 sq ft, which is 16% up on this point last year (Graph 1 below). This year, 83% of all transactions have been of a Grade A standard.

■ The largest deal of the month was the 150,000 sq ft pre-let of 160 Aldersgate Street, EC1 to DLA Piper, where planning consent has now been granted.

■ So far this year, the majority of take-up in the City has came from the Insurance, Financial & Banking sector accounting for 25%. There has been good activity from the Professional services sector, who have accounted for 21%.

CLICK ON IMAGEs BELOW TO ENLARGE

GRAPH 1City take-up

^{Source: Savills Research}

■ However, it is important to note the consistent rise in take-up from serviced office providers, who have accounted for 447,293 sq ft, equating to 12% of total City take-up. To put this into context, take-up from this type of occupier already this year is 220% up on their long term average annual figure.

■ There is currently circa 5.8m sq ft of available space in the City producing a vacancy rate of 6%, significantly lower than the long term average of 10%.

■ We anticipate this downward trend of the vacancy rate to continue throughout the remainder of 2015.

■ The most constrained submarket is SE1 with a vacancy rate of 4%. Furthermore, if the space at The Shard and the new South Bank Tower is omitted this drastically falls to just 1%, equivalent to just 202,000 sq ft of space.

■ The average prime rent for the City currently stands at £71.50/sq ft, which is calculated using the average of the top 10% of deals this year. This has risen by 14% on 2014's figure of £62.50/sq ft (Graph 2).

GRAPH 2City average rents

^{Source: Savills Research}

■ Furthermore, the average grade A rent for the City has risen to £53.00/sq ft, which is an 8% increase on 2014's average of £49.00/sq ft.

■ In the City, the £40 - £49.99/ sq ft rent band has historically accounted for the greatest number of transactions, except for 2015. This year, we have seen just 26% of deals completed within this band, compared with 35% in the £50 - £59.99/sq ft band.

■ Looking forward, the development pipeline is looking relatively healthy with an expected 6m sq ft of new or refurbished space scheduled to arrive next year, of which 37% is already pre-let. Despite there being above average levels of completions expected for the next three years, we doubt City supply will become oversupplied in the short to medium term due to strong demand.