Office space take-up 'better than during dotcom burst'

Office space take-up has not been as severely affected in the M25 zone by the credit crunch as it was when the dotcom bubble burst seven years ago, a Knight Frank survey has suggested.

Despite this, the third quarter report noted that office space take-up fell in the M25 zone and the wider south-east, reflecting harsher conditions faced by the commercial property market as a result of the global economic downturn.

Third quarter take-up across the M25 hit 589,790 square feet (sq ft), which is 20.4 per cent down on the second quarter of this year and 35 per cent lower than the same period in 2007.

Emma Goodford, head of national offices, Knight Frank, commented: "The level of requirements was dented in Q3 2008, but it needs to be placed into context with the last downturn. Back in 2001, at the peak of the last cycle, unsatisfied demand was circa 15m sq ft and this fell, virtually overnight, to 4.5m sq ft."

She added that it is important to note that several quarters have passed since the advent of the credit crunch and market conditions are much more balanced than was the case in the equivalent period six years ago.

In related commercial property news, a major waterside development near Canary Wharf has got the go-ahead from Tower Hamlets council, with the four-phase project expected to take around ten years to complete.