West End Leasing Market
Overview
The West End office leasing market has had a subdued start to 2024. Take up totalled only 600,000 sq ft, which is some 40% below the 10-year average for Q1 and the lowest quarterly take up seen since 2009. This low take-up level is in the main explained by the distinct lack of larger deals reaching completion, although there is an above average amount of space currently registered as Under Offer which should complete in Q2/3 and bring take up back into line with recognised levels.
Overall West End vacancy remains steady at 7%, however Grade A availability is now at a historic low of 1.1% of total stock because of limited development completions and the fact that Grade A space accounts for the majority of deals being transacted.
Headline Allsop Deals
In Q1 Allsop was delighted to complete an acquisition of 6,000 sq ft on the 1st floor at The Caxton, Buckingham Green, SW1 on behalf of a confidential financial sector client. This is one of the leading-edge buildings in Victoria with exceptional occupier amenity and sustainability credentials.
In addition, we continue to see strong appetite for high quality fully fitted spaces across the West End, and particularly in core Mayfair and St. James’s. At 31 Dover Street, W1 where floors are being comprehensively refurbished and fitted to a high standard, we have let the 2nd floor comprising 1,500 sq ft to Beaumont Nathan Fine Art. There are 2 other floors currently under offer due for completion as the building works are finalised all at rents more than £100 per sq ft pa.
A further theme in the market is the demand for alternative uses for well located spaces. We were pleased to let the Lower Ground and Ground Floors at 23 Kingsway, WC2 comprising 4,000 sq ft to The Secret Comedy Club for its newest West End venue – turning what would have been challenging office space into a real amenity for the West End.
Headline Market Deals
After a particularly buoyant end to 2023, the West End has seen a limited number of large transactions at the start of 2024 with no lettings of note over 40,000 sq ft.
The largest deals that have occurred include serviced office provider Orega continuing its recent expansion phase by securing 36,238 sq ft on the Ground Floor at 80 Strand, WC2.
Outside of the serviced sector a letting of the entirety of 11-14 Windmill Street, W1 comprising 28,750 sq ft to Databricks and a pre-let of the 4th and 5th Floors at 20 Carlton House Terrace, SW1 to the finance firm Campell Lutyens comprise the next largest deals done in a quarter of limited sizeable completions.
What is the Direction of Travel?
Whilst the overall statistics for Q1 2024 paint a low-key picture of the market, looking behind the numbers there is undoubtedly a large amount of activity that should come to fruition over the coming months. We are seeing the average time for leasing transactions to complete extending markedly. A partial reason for this is occupiers that are being driven to look for new options far earlier than they need to commit by the low levels of suitable Grade A supply which consequently is lengthening the time that deals are taking to complete.
That said the demand for the best spaces in the West End continues unabated with 16 deals happening across the West End at rents in excess of £100.00 per sq ft pa. Rental levels for the best spaces in well connected locations will continue to move ahead whilst the grade A availability ratio remains at such low levels.