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Knight Frank finds 2014 an excellent year for London office demand

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Last year was a particularly strong one for the London office market, with it being the best year for office leasing agreements since 2000.

This is according to a new release from Knight Frank, which explained that the take-up of office space in the central city rose by 16 per cent to reach 15.9 square feet. The firm explained that this surpasses the 10 year average figure of 13.0 square metres.

"The office market has moved in favour of the landlord thanks to a large fall in supply. Demand levels remain strong going into 2015, particularly from the up-and-coming digital and creative industries," said Knight Frank leasing partner Dan Gaunt.

"Consequently, I see rents rising this year by another 10 per cent in the City, 9 per cent in the Northern City, and 7 per cent in Mayfair."

Knight Frank Chief Economist James Roberts explained that digital and creative firms were the primary source of office demand in 2014, with companies like Google and Amazon expanding in the city. This means that 2014 is now the fourth year in a row with technology as the primary source of demand.

Overseas investors accounted for a significant portion of the sales (75 per cent), with notable buyers including Brazilian firm Safra Group and the Qatar Investment Authority.

The results are certainly positive for those with property investments in the city, and it's likely further changes could still be on the way. This year will likely see take-up climb again across the city.

Knight Frank investment partner Nick Braybook echoed this sentiment, explaining that investors are now being drawn to the city as rental growth continues. He stated that he expects London property values to continue climbing in 2015.

Date Published: 11 Feb 2015
Category: General NewsNews

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