Some widely divergent figures on the take-up of office space by businesses in the Central London area were published in the first two weeks of October, possibly reflecting the influence of one or two very large lets on the overall figures.
The first report from property consultant GVA Grimley is relatively upbeat. Provisional figures from its Central London Office Bulletin Q3 show, it reports, that the London office market has remained robust in the third quarter of 2001. But the report notes that the Q4 figures may well be affected by the tragic events in the US.
According to GVA, availability remains low at just 6.1 per cent compared with an all-time low in summer 2000 of 4.1 per cent and the near 20 per cent availability in the depths of the last recession. But crucially, it argues, overall take-up of property in central London increased by nearly one-third in Quarter 3 – 31 July to 30 September – compared to Q2 2001. Breaking this down by sector, GVA recorded an increase in take-up of space in the City from nearly 140,000 sq m in Q2 2001 to around 170,000 sq m in Q3 2001, nearly 20 per cent of which was accounted for by the 32,500 sq m pre-let of Plantation Place, EC3 to Accenture.
Take-up in Docklands in Q3 of 62,000 sq m was almost entirely accounted for by the relocation of the Barclays Bank HQ, while the West End showed a slight increase from 71,000 sq m in Q2 to 75,000 in Q3. This equates to a fall of 38 per cent compared with Q3 2000.
In stark contrast to GVA Grimley's findings, property adviser CB Hillier Parker warns of a sharp slowdown in the Central London office market in its Q3 report. 'Against a background of increasing concerns about the economic outlook, compounded by the market uncertainties caused by the 11 September attack on the US, the correction in the central London office market deepened sharply during the third quarter,' the report reads. 'While some of the deterioration may be short-lived, the magnitude of some of the changes indicates a more pronounced downward shift in activity.' Across central London as a whole this amounts to a 40 per cent drop in take-up from Q2, according to CB, to a level of 217,300 sq m. The Docklands and Fringe markets, it notes, have been particularly affected by an absence of the large pre-lets that previously supported these areas. The core market of the City and West End held up better with take-up dropping 10 per cent from the Q2 levels.
www.gvagrimley.com, www.cbhillierparker.com
Food prices
The price of food has fallen for the third consecutive month, keeping shop price inflation overall well below the general rate of price increases the British Retail Consortium says. It's Shop Price Index for September 2001 (which tracks food and non-food commonly bought goods) shows that prices on a range of commonly bought goods are just 0.1 per cent higher than September 2000. Prices rose by 0.77 per cent during the month of September, following two months of declines.
Fierce price competition in the grocery sector, combined with price decreases on major staples items such as potatoes and beef, played a big part in the decrease in prices for food items, the BRC said. The price of potatoes fell, despite lower harvest yield rates as the increased average of potatoes planted has led to a larger supply in 2001.
British Retail Consortium, tel:020 7647 1500, www.brc.org.uk
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Quarterly central London office take-up (000 sq m)
Other, Size 0 kbPrime rental growth by sector
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Source
The Facilities Business