According to British Land, demand for office space in the City of London has recovered as employers seek high-quality properties.
Occupancy rates across its portfolio have reached 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 owner added that hiring in the city in the third quarter soared 5 percent above the long-term average.
Customers from the banking and finance sectors are driving activity in both the City and West End of London.
Employers are looking for high-quality properties, with amenities such as outdoor terraces, cafes and breakout spaces, to attract top talent in the era of hybrid work, the company said.
Recovery: British Land says occupancy rates across its portfolio have reached more than 96% and London’s Square Mile (pictured) is “performing particularly well”
Searches for office space in London in the first three quarters of 2023 were 25 per cent below the ten-year average following Liz Truss’ mini-Budget.
But the volume of space offered is 8 percent above the ten-year average and active demand is 27 percent higher as the sector recovers.
However, asset values have been affected due to rising interest rates – the Bank of England’s base rate currently stands at 5.25 per cent.
The value of British Land’s properties fell 2.5 per cent to £8.7bn over the half, wiping almost £200m off the value of its portfolio year on year.
Its pre-tax loss more than doubled, from £20m to £49m 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 rent growth of 2 percent to 4 percent for business campuses, 4 percent to 5 percent for London urban logistics and from 3 percent to 5 percent. for commercial parks.