Tenants are being forced to look outside traditional areas of the City and West End owing to rising rents and dwindling supply.
Jones Lang LaSalle’s central London office market report said rents are poised to rise to an average of £60 per sq ft in the City and £105 per sq ft in the West End by the end of the year.
In addition, a shortage of supply has created an upsurge in pre-let activity as occupiers look to secure space and forced tenants to look beyond the core to meet requirements.
As a result, Battersea and the Royal Docks are among areas that will develop into new London office locations, said JLL.
Neil Prime, head of office agency at JLL, said: “Improving amenities and accessibility for employees is also becoming more important, with high-quality retail and residential offerings becoming increasingly attractive. Areas such as King’s Cross, South Bank and Stratford tick all of these boxes, so it’s no surprise that these are now on occupiers’ radars.”
In the office investment market, central London turnover could hit £17.5bn by the end of the year – close to record levels.
Damian Corbett, head of central London office investment at JLL, said: “London continues to be very high in demand with global investors, and rising domestic savings in many countries has led to an increase in assets under management from institutional and other investors.”