Take-up falls behind 2015 but continues to exceed the 10-year average

Supply and demand snapshot

■ 208,481 sq ft of take-up was recorded in October across 30 transactions. This brought the year-to-date total to 3.4m sq ft, 5% below the same point in 2015 but 14% above the 10-year average.

■ The largest transaction to complete in October was The Economist's acquisition of the 6^th floor (26,801 sq ft) at The Adelphi, 1-11 John Adam Street, WC1. The Economist have signed a 15-year lease at a rent of £79.50 per sq ft.

TABLE 1Key October stats

^{Source: Savills Research}

■ Another notable transaction to complete in October was Mirabaud Group's acquisition of the 8^th floor at Verde totalling 14,639 sq ft on undisclosed terms. The building is now 60% let with 113,731 sq ft remaining across four floors.

■ We have recorded 20 pre-lets so far in 2016 totalling 1.02m sq ft, which equates to 30% of 2016's total take-up to date. The average size of the prelets is 51,002 sq ft, while the average transaction size in 2016 excluding prelets is 7,843 sq ft.

■ Tech & Media firms continue to be the most active in the West End accounting for 36% of total take-up, followed by Insurance & Financial Services firms with 13% and Retail & Leisure firms with 11%. In contrast Professional firms have accounted for just 2% of take-up so far in 2016 (Graph 1).

GRAPH 1Take-up by size band – 2016

^{Source: Savills Research}

■ 100,032 sq ft went under-offer in October including the 13th floor (12,949 sq ft) at The Adelphi, 1-11 John Adam Street, WC1 and the part 5th floor (12,457 sq ft) at 80 Victoria Street, SW1.

■ This has brought the total amount of space under-offer in the West End to 476,154 sq ft, which is 21% below the 10-year average.

■ Mayfair & St James's has been the most active sub-market so far this year with 86 completed transactions, followed by North of Oxford Street (East) with 41 and Victoria with 34. Despite this, North of Oxford Street (East) has seen the greatest volume of space leased with 434,246 sq ft, followed by Mayfair & St James's with 431,866 sq ft and Victoria with 404,669 sq ft.

■ Supply rose for the second consecutive month, standing at 4.16m sq ft at the end of October, equating to a vacancy rate of 3.4%, its highest level since May 2015 (Graph 2). Notable supply to be added to the pipeline included 43,731 sq ft at 130 Jermyn Street, SW1.

GRAPH 2Supply

^{Source: Savills Research}

■ The highest rent recorded in October was £95.00 per sq ft. The transaction saw Raine Group acquire the top 7^th floor at 1 Welbeck Street, W1 totalling 4,894 sq ft on a 10-year lease.