The latest research conducted by BNP Paribas Real Estate suggests that the markets for office space in both Midtown and the City of London have registered an upturn in activity during the third quarter of 2011. Both areas have apparently been benefitting from the rise in rent and the lack of an adequate supply of Grade A office space within the West End.
The City's total take-up was 1.25 million square feet of office space during the third quarter of this year, a big rise from the 0.87 million square feet take-up that was seen in the second quarter, while prime rents for offices in Midtown rose to as much as £52.50 per square foot. This is fuelled by the fact that those who would traditionally choose to occupy office space in the West End are now instead moving east in order to take advantage of both lower rents and better availability. Prime rents in the West End are sticking at £100 per square foot according to the research of BNP Paribas Real Estate, which is almost the double the cost of offices in Midtown. Rents in the West End have risen by as much as 18 per cent over the course of the last 12 months.
"Due to scarcity of stock in Mayfair, Soho and St James's, we are seeing a number of companies, such as those in the TMT sector who would be considered as natural West End occupiers, relocating to the Midtown and City postcodes," says
BNP Paribas Real Estate's MD of Central London, Dan Bayley.
