Central London lettings in 2008 were down one-third on 2007 figures with take-up falling from 11.8m sq ft to 7m sq ft in 2008 according to Atisreal.
Dan Bayley, head of national lettings and sales, said: 'There are no surprises when we report that take-up is down, however, what is interesting to note is that this isn't the worst performing year this decade. In 2003 take-up was 5.87m sq ft when the vacancy rate was soaring at 12%. This is not the case today, with the vacancy rate at just under 7%.'
'The first half of 2009 will be just as tough as 2008, but the silver lining for tenants actively looking for office space is that they may find rents coming to a level that they cannot resist sooner than might have been expected. With rents decreasing and more supply to choose from it will offer tenants value for money.'
Annual take-up in the City of London was 3.71m sq ft down 30% on 2007 the lowest figure since 2003. It said overall take up was bolstered by the largest letting in the fourth quarter when law firm Irwin Mitchell took 34,000 sq ft at Castlemore’s 40 Holborn Viaduct, at a rent of £51.75/sq ft.
The West End market fared slightly better from the initial impact of the downturn due to its broader occupier base and lower dependence on the financial sector. Take-up fell by 34.5% and supply increased from 810,000 sq ft in 2007 to 1.09m sq ft in 2008.
Take up in the Docklands was down by 10%. Supply increased from 2.77m sq ft in 2007 to 4.23m sq ft in 2008.