Despite take-up being down more than 20% on the previous quarter, current City Fringe occupation (approximately 895,000 sq. ft) for 2013 has already surpassed the entirety of 2012.
With availability knocking around the 5.5% mark, rental growth has gone up steady in City Fringe areas. Aldgate in particular has shown signs of increased demand, with an average 20,000 sq. ft Grade A unit taken on a ten-year lease achieving £40 per sq. ft.
One of the main driving forces behind the increasing uptake of central office space has been a marked increase in the domestic demand for buildings. Q1 and Q2 of 2013 were characterised by increased foreign investment, with overseas investors buying up super-prime estate in the capital.
This fuelled impressive figures for the first half of the year, but as stock has run short in this area of the market, it seems that a greater number of domestic buyers have come into the market to secure space in the next ‘layer’. Increased access to UK capital has been highlighted as one potential cause for this phenomenon, allowing a greater proportion of UK-based purchases.
City Fringe has seen a steady increase in uptake over the past 12 months, in line with increased City demand. Areas like Clerkenwell, Shoreditch and Aldgate are now the focus of a number of new projects for both residential and commercial development.
Shoreditch Office Space works across the East London property markets to identify, negotiate and secure offices on behalf of our clients. If you would like to learn more about the services we provide, please contact us today.