West End Leasing Market
Overview
The West End market experienced a marked upturn in fortunes in Q3 2024, with take up reaching just over 1.2M sq ft – up over 60% on Q2 and 15% over the long term 10-year quarterly average.
The continuing theme of “Quality Counts” is still prevailing with Grade A space accounting for 83% of all space taken across the quarter and the financial services sector accounting for 45% of all demand.
Availability
The overall West End vacancy rate has fallen slightly in Q3 to 7.5% overall, although this remains above the 10-year average of 5.3%. Drilling down into this data further shows the highest vacancy rates are currently in the Covent Garden and Fitzrovia submarkets at 10% and 12% respectively. These high rates can be explained by the recent delivery of some larger refurbishment schemes, combined with a higher-than-average level of occupier contraction from the technology sector.
The lowest level of availability continues to be seen in Mayfair at just sub 5% vacancy. Notably the biggest drop in availability is in Soho where availability has halved from 10% vacancy in Q3 2023 to 5% now – strongly demonstrating businesses desire to ensure their workforces benefit from high levels of amenity outside the office.
Headline Allsop Deals
In Q3 Allsop were delighted to advise ABF Plc on the Pre-Let acquisition of their new office space at The Fitzrovia, 247 Tottenham Court Road, W1. The FTSE 30 food and retail conglomerate has secured 31,000 sq ft over 4 floors at M&G/Nomura’s flagship new West End development.
In Victoria we were pleased to advise a private landlord on the disposal of 2 floors at 22 Carlisle Place, SW1 totalling 9,000 sq ft. Following a refurbishment of the reception area the 3rd & 4th floors were let to Western Heritable and VEV Services respectively.
Lastly the 5th floor at 262 High Holborn, WC1 comprising 4,600 sq ft was let to Modulaire Group on behalf of Lazari Investments. This leaves the 4th floor as the final availability in the building which has been fitted out to an exceptional standard and is available now at a quoting rent of £75.00 per sq ft.
The M Building
The Fitzrovia
Headline Market Deals
There were two long discussed pre-lets of over 100,000 sq ft that finalised in Q3. Firstly, accounting and consultancy partnership BDO securing 220,000 sq ft at The M Building (The former Debenhams on Oxford Street) was by some distance the largest deal the West End has seen for over a year. Secondly, global investment banking powerhouse Evercore re-locating out of several smaller buildings in Mayfair and taking 135,000 sq ft at BGO’s 105 Victoria Street, SW1 is another large vote of confidence for the Victoria submarket.
What is the Direction of Travel?
In terms of up-coming supply there is a total of 6M sq ft currently under construction in the West End due to be completed before the end of 2027. 1.8M sq ft (30%) of this supply has already secured a pre-commitment from occupiers.
Occupiers continuing to pursue a decreasing amount of available Grade A stock is resulting in prime rents continuing to increase, with the majority of West End submarkets now exhibiting regularly achieved rents at over £100.00 per sq ft. Submarkets with below 6% vacancy will continue to see rental growth approaching double digits as we move to the end of the year.