12
Feb2014
London Midtown Market Will Be Buoyed By Further Pre-Let Activity In 2014, Says Farebrother/CORFAC
London, UK (February 12, 2014) - Data released by Farebrother/CORFAC today shows that the recovery in Midtown’s office market continued in Q4 13, with deals totalling 612,000 sq ft meaning Take-up for the year exceeded 1.9 million sq ft.
The standout deals in Q4 include the letting during construction to publishing firm Hachette who agreed to lease the entire 135,000 sq ft at Carmelite Riverside, 50 Victoria Embankment, EC4, and the pre-let of 48,070 sq ft at 98 Fetter Lane, EC4, to law firm Macfarlanes. These are the latest in a series of pre-commitment transactions signed in Midtown in 2013, which also include law firm Bird & Bird’s pre-let of 142,500 sq ft at 12-14 Fetter Lane, EC4, and Saatchi & Saatchi’s letting during construction of the entire 97,400 sq ft of office space at 40 Chancery Lane, WC2.
In addition to a number of large pre-lets, Midtown has been characterised by a high volume of small transactions, with that trend continuing in Q4 when 66% of the 96 deals were in the 1-5,000 sq ft bracket.
Julian Hind, Head of Leasing, Sales and Development, commented:
“Midtown has become a two-tier market in 2013, with a high volume of small lettings alongside a small number of large pre-lets or lettings during construction. We see the latter driving activity in 2014, when we think as much as half a million sq ft will be pre-let.
“These are exciting times for the Midtown market, with Crossrail set to trigger a boom in office development and the proposed Garden Bridge providing a link to South Bank. These catalysts, coupled with an improving economy, mean we are optimistic about the market’s prospects in 2014.”
Availability in Midtown remained low in Q4 13 at 4.6%, but the supply squeeze should ease slightly in 2014 with 756,000 sq ft of additions expected including 295,000 sq ft at Kato Kagaku’s Refurbishment of Aldwych Quarter, WC2.
The year has seen investment volumes rise slightly, with a total of £2.7 billion invested, versus £2.57 billion in 2012. A total of £596 million was Invested in 15 transactions in Q4 13, representing a strong quarter of Investment, 30% higher than the five-year quarterly average (£459m).
Alistair Hilton, Partner at Farebrother, added:
“Midtown’s diverse occupier-base and low availability have combined to make it London’s most compelling investment proposition, with the turnover of Investment 6% higher in 2013 than the previous year. Despite the continuing trend for overseas investment into prime London real estate, over 65% of transactions in Midtown were undertaken by UK investors. This reflects its potential for performance.”
About Farebrother/CORFACFarebrother is an entrepreneurial and experienced firm of commercial real estate advisors. The firm is privately-owned, established in 1799 and is headquartered in London, England. Farebrother delivers responsive office, industrial, residential and retail leasing and investment acquisition and disposal, property management, lease advisory, valuation and corporate services across the UK, for leading Fund, Institution, Developer, Occupier and Private clients. Farebrother is the UK affiliate of CORFAC International and is regulated by the Royal Institution of Chartered Surveyors. www.farebrother.com
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