from overseas buyers, UK is still the biggest buy group
18% Europe 28.5% United Kingdom
2012 Central London Purchasers Split by Nationality
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Savills World Research UK Commercial
Review and Outlook Central London office
GRAPH 1
Central London office take-up picked up slightly in 2012
10 12 14
0 2 4 6 8
GRAPH 2
The vacancy rate has risen to 6.7% due to development and refurbishment activity
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
February 2013
Graph source: Savills
Graph source: Savills
SUMMARY
■ Take-up in 2012 was broadly the same as the 2011 total. The City of London saw take-up rise to average levels, while the West End and Docklands had a below average year.
■ The overall central London vacancy rate rose due to a slight pick-up in development completions, and a more robust rise in refurbishment activity. Despite this there are pockets of undersupply in many size bands and locations, and these are where rents are beginning to rise.
■ Prime rents rose by 4-5% in central London last year. We are expecting slower but steady rental growth over the next five years
■ Investment in central London offices rose to over £15bn in 2012, with more than 65% of the purchases being by non-domestic investors. We expect this trend to continue in 2013, albeit with some non-domestic investors becoming more adventurous on location or security of income.
“We expect to see a steady rise in leasing activity in the more affordable fringes.” Mat Oakley, Savills Research