West End Letting Market

Proactive landlords are increasingly moving to provide prospective tenants with solutions in an attempt to reduce voids by combining the benefits of traditional leasing and serviced offices

The final quarter of 2018 was a strong end to the year from a leasing statistics standpoint, with take up at the end of the year totalling 4.8M sq ft. Once again these take up figures were in majority as a result of a number of larger lettings completing on large new build and comprehensively refurbished schemes, as evidenced by lettings at The Brunel Building, W2 (60,000 sq ft to Coach, Alpha FX and The Premier League) 5 Merchant Square (160,000 sq ft to WeWork), 25 Wilton Road (80,000 sq ft to IWG Spaces) and 21 St James’s Square (50,000 sq ft to Cinven) amongst others..

In contrast to this, the smaller end of the market (sub 10,000 sq ft) continues to prove challenging, particularly for second-hand accommodation, with traditional leasing models continuously competing with the increasing supply and quality of serviced office and co-working accommodation.

As a consequence of this, rents are continuing to come under pressure in this portion of the market, uniquely offering a clear disconnect between prime and secondary space, which traditionally would be expected to track each other more closely.

In order to address these challenges, proactive landlords are increasingly moving to provide prospective tenants with solutions in an attempt to reduce voids by combining the benefits of traditional leasing and serviced offices. This includes flexible lease terms, fixed costs and short form leases combined with undertaking Category B fit out works. The success of these initiatives is being seen at properties such as GPE’s 54 Jermyn Street and LGIM’s Capsule initiatives at 1 Southampton Street and 55 Strand, where lettings have been agreed with dramatically reduced void periods and rents in some cases as much as 15% above traditional ERV’s.

Supply at the end of 2018 stood at 4.6M sq ft, a vacancy rate of 3.9%, continuing to be below the 10 year average of 4.4%. There continues to be real concern around the constrained supply pipeline of new or Grade A development, through fewer construction starts and continued strong pre-letting activity.


Prime Rents have remained stable at £120.00 per sq ft and rent frees remain at 22-24 months on a 10 year term.

The Tech & Media sectors continue to be the main driver of demand at 40% of total West End take-up, followed by the serviced office sector with 19% of lettings in the market.