Market snapshot

Office Market Pulse Central London Q1 2013

The first quarter of 2013 saw the Central London office market rebound from its normal sluggish start to show quarterly take-up at 2.5m sq ft, its highest level since 2010 and a 30% increase from last year.

The Google acquisition of 860,000 sq ft (the largest single transaction for over 10 years) at King's Cross has distorted these figures but with over 2m sq ft reportedly under offer, the highest for 18 months, are we about to see signs of consistent take up and a return of business confidence to the much needed office market?

This edition of the Central London office market pulse features a spotlight on the Euston and King's Cross office market.

Occupiers select product over post code

With the continuing trend of occupiers selecting product over post code, we are seeing multiple centres of activity in the Central London. Examples of this include Amazon under offer at 60 Holborn Viaduct, EC4, Hill & Knowlton at The Buckley Building, Clerkenwell, EC1 and Network Rail leasing space at 1 Stratford Place, E20.

We believe the importance of product over location will continue throughout 2013 and beyond, resulting in rents potentially rising faster in the fringe locations compared with the prime.

You can download a PDF version of this Central London office market pulse, or to read and sign-up to receive Office Market Pulses from other UK centres, click here

In this issue:

Key transactions in Central London Q1 2013

Property  Size (sq ft)  Landlord(s)/vendor Tenant Lease information
King's Cross central, NW1 860,000 Argent Google Undisclosed
20 Fenchurch Street, EC3 66,000 & 51,000

Land Securities & Canary Wharf Group

Liberty Insurance Group £65 per sq ft
10 Great Pulteney Street, W1 44,700 Undisclosed Creston plc £47 per sq ft
123 Victoria Street, SW1 33,000  Land Securities  John Lewis partnership  £55 per sq ft 
1 Stratford Place, E20 33,000 Westfield Network Rail £33 per sq ft
28 Kirby Street, EC1 22,700 Mercer Real Estate Partners Blinkbox (Tesco) £36 per sq ft
Buckley Building, EC1 20,000  Derwent London Unilever £42.50 per sq ft 
Eagle Place SW1 10,700 The Crown Estate Haymarket Financial £95 per sq ft
23 Saville Row, W1 9,900

Plaza Global Real Estate Partners 

Angelo, Gordon & Co, Viking Global Investors  £105 per sq ft

Central London office take-up and availability

  • Central London office market shows Q1 2013 take-up at 2.5m sq ft, its highest level since 2010 and a 30% increase on last year.
  • West End leads on Central London office take-up with 1.4m sq ft in Q1 2013.
  • Availability in Central London peaks in the City, with 8m sq ft on the market.

Development Q1 2013: completions to return to trend levels

Projected development completions in 2013 are expected to return to trend levels, but demand is expected to remain relatively flat with no single sector showing significant growth, although TMT (Technology Media Telecommunications) should continue to be the dominant business sector.

TMT sector skews take-up figures

While property headlines have celebrated the emergence of the TMT sector, such a broad definition of occupier has grouped traditional media businesses (advertising, marketing, etc.) with technological behemoths such as Google and Amazon and has therefore skewed market take-up figures to show a potentially misleading dominance from old media to new.

Central London office developments

Property  Size (sq ft)  Developer Due date
Africa House, 64-78 Kingsway, WC2 110,000 Freshwater Complete
The Place, London Bridge, SE1 430,000 Sellar Property Group Q2 2013 
6 Bevis Marks, EC3 160,000 AXA/MGPA Q3 2013
10 Brock Street, Regents Place, NW1 340,000 British Land Q3 2013 

Spotlight on Euston and King's Cross office markets

The Euston and King's Cross office market has changed dramatically over the past three years. Evolving from a fringe location bordering the West End and Midtown, it is now a credible commercial destination attracting blue chip corporations and international businesses. Enjoying access to excellent national and international rail infrastructure, British Land's Regent's Place and Argent's King's Cross Central schemes have pioneered high grade office development in the area and are pushing prime rents to new peaks.

Google's £1bn move to King's Cross

Most recently, Google has selected King's Cross for its 860,000 sq ft campus joining BNP Paribas, The Guardian and Macmillan Publishing Group amongst others. Longstanding West End occupiers Publicis Group are also rumoured to be considering the last phase of Regent’s Place for their London HQ.

115,000 sq ft leasing instruction in Euston

Our activity in Euston has involved a 115,000 sq ft leasing instruction at One Euston Square for the Euston Estate, the acquisition of 30,000 sq ft of offices on behalf of Serviced Office Group and the purchase of a 13,000 sq ft office building in King's Cross on behalf of the National Union of Students.

For a more detailed overview of the UK office market, read our Office Market Review 2013: Addressing Obsolescence

For our latest report of the UK property investment market, read UKIT Q1 2013

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David Earle

020 7198 2270

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David Earle
Head of Central London Office Advisory

020 7198 2270

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