Empty office space in London is finally decreasing from a high at the beginning of the year as businesses struggled to stay afloat in the recession.
In the first quarter of 2009, vacancies hit 10 million square feet – almost 12 percent of all office space in the capital. Figures for the recently-ended third quarter show that vacancy rates have now decreased to around 10 percent, or 8.6 million square feet. 1.2 million square feet of new space was let in Q3.
However, analysts are stating that this does not signal ‘business as usual’, because the new contracts have been heavily incentivised by the reduction in rental costs and other perks, such as rent-free periods. Although the upsurge does suggest that the worst of the crash is over, there is still likely to be a long way to go before both vacancy rates and rental packages return to 2007 levels.