Number of prelets surges as development pipeline dwindles
Twenty prelet deals or pre-completion lettings of more than 50,000 sq ft have been done in central London in the year to date, making 2018 the best year for a decade for these deals.
Research from Savills also indicates that at least a further eight prelet deals are under offer.
To date, 2.96m sq ft has been prelet in 2018, putting it ahead of 2013 when 2.74m sq ft of prelets were agreed.
Twenty prelet deals or pre-completion lettings of more than 50,000 sq ft have been done in central London in the year to date, making 2018 the best year for a decade for these deals.
Research from Savills also indicates that at least a further eight prelet deals are under offer.
To date, 2.96m sq ft has been prelet in 2018, putting it ahead of 2013 when 2.74m sq ft of prelets were agreed.
“Activity is being driven by a far greater spread of occupier as the City and its environs reinvents itself again and draws occupiers from across London, with tech and media firms among those making very significant long-term commitments to new buildings, alongside traditional City occupiers including those in the insurance and financial sectors,” said Stuart Lawson, director in the City office leasing team at Savills, said.
“These occupiers are being driven by upcoming lease events, continued limited new developments coming on to the market and, clearly, a long-term belief in London. At the same time, developers are delivering some first-class buildings that occupiers and their staff want to work in. In turn, this high level of preletting will further reduce the supply of available office space on the market in the forthcoming years.”
Ed Betts, co-head of West End offices at Savills, added: “Prelets are not a new phenomenon in London, but their focus has historically been in the City, where large occupiers have in-house real estate teams educated on the nuances of development.
“In the West End, it has historically been business decision makers leading office searches, many of whom struggle to visualise development opportunities. However, 2018 has seen more preletting activity in the West End than ever before, a direct result of the lack of plausible options in the pipeline but also because take-up is being led by real estate-savvy global brands including Facebook and Sony, both of which have committed to new European headquarters in the West End and King’s Cross.”
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