Demand for office space in the City of London has bounced back as employers seek high-quality properties, according to British Land.
Occupancy rates across its portfolio have hit more than 96 per cent and the Square Mile is ‘performing particularly well’, the FTSE 250 firm said yesterday as it revealed first-half results.
The landlord added that take up in the City in the third quarter soared 5 per cent above the long-term average.
Clients in the banking and financial industries are driving activity in both the City and London’s West End.
Employers are seeking high-quality properties – with amenities such as outdoor terraces, cafes and breakout spaces – to attract top talent in the age of hybrid working, the company said.
Recovery: British Land says occupancy rates across its portfolio have hit more than 96% and London’s Square Mile (pictured) is ‘performing particularly well’
Searches for London office space in the first three quarters of 2023 was 25 per cent below the ten-year average following Liz Truss’ mini-budget.
But the volume of space under offer is 8 per cent ahead of the ten-year average and active demand is 27 per cent higher as the sector bounces back.
However, asset values have taken a hit due to the increase in interest rates, with the Bank of England’s base rate currently at 5.25 per cent.
The value of British Land’s properties dropped 2.5 per cent to £8.7billion over the half year – wiping nearly £200million off its portfolio value year on year.
Its pre-tax loss more than doubled from £20million to £49million in the six months to the end of September, compared with the same period last year.
The firm said it expects to hit the top end of its full-year guidance of 2 per cent to 4 per cent rental growth for business campuses, 4 per cent to 5 per cent for London urban logistics, and 3 per cent to 5 per cent for retail parks.
