Growing Shortage of West End Office Space
7 Apr, 2011, London
The limited availability of good quality space in London’s West End is becoming critical according to Cushman & Wakefield, the global property consultant. With demand expected to pick up, largely due to more than 11 million sq ft of lease events taking place across the West End in 2011-13, upward pressure on rents will get stronger and pre-lets will become more common.
With no significant development completions in the West End this quarter, total supply fell by more than 10% over the first quarter of 2011. Central London supply levels stood at 18.1million sq ft at the end March 2011, a fall of 4% year-on-year.
West End take-up activity in the first quarter was just under 600,000 sq ft. Building on trends seen in 2010, TMT was the most active sector accounting for 45% and Soho & Covent Garden was the most active submarket, in the West End. Total take-up across central London was 1.32 million sq ft.
Rents around £100 per sq ft are becoming commonplace in Mayfair & St James’s as a number of niche financial players continue to take space, and there is no sign of rents slowing down in the short term. City rents have remained stable at £55 per sq ft.
Guy Taylor, Head of West End Offices, Cushman & Wakefield, said, “This market in the West End is being driven by a lack of choice of good quality space due to the lack of development since the beginning of the recession. Take-up is being driven by lease events more than expansion and the TMT and financial sectors are pushing the market forward.”