Office demand surges in London as employment continues to grow

 
Office demand surges in London as employment continues to grow

The employment prospects in London are starting to pick up once again it seems, with demand from companies for office space in the capital suggesting that many are looking to expand or hire more staff in the coming months. 

It is a factor that could have a knock-on effect on the residential sector, with any recruitment drive from London-based companies likely to see more people moving into the capital, giving a boost to the private rented sector in particular. 

According to the latest offices report released by Knight Frank, office demand in the city has now reached its highest level since 2000, with firms not in the financial sector in particular now starting to look at commercial spaces within the City of London's so-called Square Mile. 

Its report said that office space uptake in the third quarter of the year reached some three million square ft, rising from the 2.2 million square ft that was recorded in the second quarter of the year. This means it rose by some 39 per cent in the space of just three months. 

Knight Frank said uptake has not been this high since the second half of 2000, and added that the current rate is way ahead of the long-term average, which sits at 1.7 million square ft. 

"I see this as evidence of the Manhattan-isation of the City office market, where finance is now one of several sources of office demand now the square mile’s economy has drawn in a variety of new industries, as is the case in New York’s key office markets," said Dan Gaunt, head of City Agency at Knight Frank.

In the nine months so far in 2014, the uptake of office space has hit some 6.9 million square ft, which is already ahead of the figure for the whole of 2012, when it ended the year at 5.8 million square ft. 

Knight Frank said that many of the industries now taking up space in the City are those which would not have done in the past, which is helping to boost demand, with the likes of Amazon having come to the area in the last few months.