Growing shortage of West End office space

Cushman & Wakefield say lack of development is driving lack of choice of good quality space

Article posted: 13 Apr 2011

The limited availability of good quality office space in the West End of London is becoming critical according to Cushman & Wakefield, the global property consultant. With demand expected to pick up, largely due to more than 11m 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 18.1m 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 the most active West End submarkets were offices in Soho and office space in Covent Garden. Total take-up across central London was 1.32m sq ft.

Rents around £100 per sq ft are becoming commonplace for office space in Mayfair and 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.”

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Posted by Jo