The start of 2015 has seen the strongest first quarter take-up of office space for five years, with 3.1m sq ft transacted between the start of January and end of March.
The rolling annual total has now reached a post-recessionary record of 15.2m sq ft, the highest since 2007.
The effect of high take-up and low availability is placing significant upward pressure on rents.
The West End is seeing the strongest rental growth expected to be 15.6% by the year end, but all areas are expected to see growth.
Demand for office space in the centre has been strong for somewhile now and this coupled with the short supply of good quality offices, we expect to see continued growth in rental values for the time being.
There have been a few exceptional deals in the prime areas of the West End and this has caused landlords of new space to have their heads turned and they are now quoting rents at levels that we have not seen on such a consistant basis before.
A total of 1.6m sq ft of speculative development is scheduled for completion this year, but with such strong letting activity will see much of this space absorbed quickly which will keep pressure on rental levels to stay high.
Financial and business service occupiers have continued to have the greatest impact on take-up for much of the last 18 months and we expect this area to continue to have the greatest impact on keeping the rental levels.