Take-up of Central London offices reached 888,551 sq ft (82,500 m2) in July 2016, the third highest monthly take-up figure for 2016, according to the latest research from BNP Paribas Real Estate.
The July performance was somewhat unusual as leasing activity tends to slow over the summer period and dispels fears that London office vacancies will rise due to ongoing economic and political changes following the Brexit vote to leave the EU.
Dan Bayley, head of City leasing at BNP Paribas Real Estate said: 'Positive take-up levels for July show that even in the face of market uncertainty large occupiers are still committing to space, albeit with a continued trend towards shorter lease lengths as businesses search for greater flexibility.'
Leasing activity was dominated by the banking & finance sector, which accounts for 25% of London office take-up for the year so far. July's biggest deal saw Wells Fargo take 21,000 m2 of space as owner-occupier at 33 Central, King William Street, EC4. Three other deals of over 50,000 sq ft (4,650 m2) were transacted in July, two of which took place in the City including Amazon’s 7,430 m2 letting at Principal Place, EC2.
The City saw the highest take-up level of the Central London submarkets, with volumes reaching 280,000 m2 compared to 138,000 m2 in the West End and 35,000 m2 in Midtown.
The vacancy rate in Central London saw a slight drop from 5.43% in June to 5.26% in July, but well below the long-term average of 7.03%.
The July take-up figure rests above the long-term average for the month (81,300 m2) and brings total volumes for the year to 560,000 m2.
Eonomic sentiment in the UK has become more bearish since the Brexit vote and the European Commission’s latest Economic Sentiment Indicator showed a drop of 4.4 points in July. The greatest fall in confidence has been felt by small to medium-sized businesses, according to the CBI.