West End Leasing Market
Overview
The West End office leasing market started the year at a relatively modest pace with 0.85M sq ft of transactions being completed across Q1 2025. This represents a fall of 18% from Q4 2024, albeit slightly above the same period last year.
In terms of supply the West End vacancy rate rose to its highest level since summer 2024 reaching 7.8% of total stock. This was because of some speculative completions coming on stream (350,000 sq ft) combined with the relatively modest take up figures mentioned above.
The development pipeline in 2025 is substantial, with 700,000 sq ft of total completions in Q1 (50% pre-let). A total of 5.7M sq ft is due for completion by the end of 2027, with 41% of this pipeline having already secured pre-commitments. That said certain submarkets continue to suffer from supply shortages with Mayfair, St. James’s and Soho all continuing to have less space available to let than last year.
Headline Allsop Deals
We were delighted to finalise the leasing campaign at 262 High Holborn, WC1 on behalf of Lazari Investments where the last available floor in this 40,000 sq ft top grade refurbishment has been completed. Eton Bridge Partners secured the 4th floor comprising 4,600 sq ft of premium fully fitted space.
Headline Market Deals
The largest letting transaction in Q1 came late in the day where AMEX has taken an additional 78,000 sq ft in Belgrave House, 76 Buckingham Palace Road, SW1 on a new 15-year lease with a break at the 10th year. This increases their total footprint in the building to 209,000 sq ft and puts to an end a search that considered wider re-location options.
What is the Direction of Travel?
Whilst Q1 in the West End demonstrated a sluggish start, there are substantial lettings in the pipeline with a handful of deals of over 100,000 sq ft in advanced negotiations that are expected to be finalised in the coming months.
We anticipate increasing rental levels in the core submarkets as the supply side shortage of the best space continues to bite. We are starting to see lettings of second-hand Grade A space also continue to increase due to this lack of brand-new accommodation in specific locations (40% in Q1 2025 against 24% across the whole of 2024). This appears to indicate that occupiers are more willing to compromise on building than location which is a trend we will be continuing to monitor closely.