West End Leasing Market
Overview
The West End office leasing market closed the year with 3.52M sq ft of transactions being completed across 2024. It was very much a year of two halves with H1 take up being very sluggish at only c.1.2M sq ft, whereas activity accelerated notably towards the end of the year with the H2 total of over 2.3M sq ft of lettings nearly doubling what had been achieved in the first 6 months. Q4 totalled 1.1M sq ft of new lettings. That said, the overall take up level remained consistent with that achieved in 2023, but still below the 5-year average.
In terms of supply the West End vacancy rate crept up slightly from 7% of total stock at the start of the year to 7.6% at the close. This was predominantly because of some significant development completions coming to the market in Q4, the largest of which is Seaforth Land’s Space House, WC2 development where c.235,000 sq ft has reached PC and is now available.
We continue to see good rental growth for newly refurbished space across the West End, with the Mayfair, St. James’s and Soho submarkets exhibiting average rental increases of more than 10% across 2024. We now assess the Grade A average prime rent in the West End to be £95.00 per sq ft. We are regularly seeing negotiations in the late £100’s / early £200 per sq ft for premium space with terraces in prime Mayfair & St. James’s locations.
Headline Allsop Deals
In Q4 24 Allsop were delighted to advise two separate medical occupiers on their acquisitions of 24 Newman Street, W1 and 248 Great Portland Street, W1 totalling 8,000 sq ft. These deals continue to show the attractiveness of good West End locations to the ever-expanding private healthcare sector.
We were also proud to conclude a pre-letting of warehouse style fully fitted accommodation in Covent Garden at Imperial House, 8 Kean Steet, WC2 on behalf of CCLA. Zero100 have secured the 3rd floor comprising 5,400 sq ft. There are a further 3 floors coming available in 2025 totalling 19,000 sq ft.
Lastly another fully fitted option was successfully leased at Storybox, 80 South Lambeth Road, Vauxhall, SW8 on behalf of General Projects to a logistics company comprising 7,500 sq ft. There remains 14,000 sq ft of outstanding fully fitted and furnished units available to lease.
Imperial House, 8 Kean Steet, WC2
Storybox, 80 South Lambeth Road, Vauxhall, SW8
Headline Market Deals
The largest letting in Q4 was the pre-let of 85,000 sq ft to Creative Artists Agency (CAA) at 21 Bloomsbury Street, WC1 – yet another example of a substantial occupier moving from a fringe location (in this case Hammersmith) into core West End to maximise the workplace experience for both their clients and workforce. Two other notable pre-lets also signed in Q4 were Investcorp securing 25,000 sq ft at the now fully pre-let 25 Baker Street, W1 from Derwent London and The Irish Embassy taking 32,000 sq ft from The Crown Estate at 10 Spring Gardens, SW1.
What is the Direction of Travel?
It seems likely that the increased activity seen in the market in the H2 24 will continue as we move through 2025. The levels of active demand remain healthy with numerous high-profile searches being launched at the end of 2024. Whilst the level of pipeline stock appears large with just under 6M sq ft currently under construction in the West End due for completion in the next 2 years, just over 40% of this already pre-committed. As a result, occupiers needing to relocate through 2025-26 may find their options increasingly restricted, particularly in the most popular submarkets of the West End which in turn should drive continued rental growth.