West End Letting Market

Overall take up for the quarter totalled c 1.1M sq ft and the amount of space under offer remains substantially above the long term average

The opening quarter of 2019 has undoubtedly felt like a more restrained West End leasing market, with many small and medium sized businesses notably exhibiting more trepidation about committing to new, traditionally leased office spaces. As such, the number of transactions completed this quarter has been amongst the lowest we have seen for the last five years. However, this continues to sit contrary to the statistics for the amount of space let, with larger space takes continuing to dominate the market. The trend for larger Tech/Media organisations and Serviced Office space providers to secure new leases has continued.

These occupiers are seemingly undeterred by the current political uncertainties having taken over 50% of space taken in Q1 (30% and 20% respectively). The remaining 50% has been evenly spread amongst the Financial, Government and Energy sectors. Overall take up for the quarter totalled c 1.1M sq ft and the amount of space under offer remains substantially above the long term average. As such it is reasonable to assume that leasing activity should continue apace into the second quarter of the year and in the event of more confidence returning to smaller occupiers as a result of Brexit certainty, take up figures could improve dramatically.

Examples of these larger transactions undertaken this quarter include Sony securing a substantial pre-let in Kings Cross at S1, 4 Handyside Street of 125,000 sq ft, Facebook securing an additional 175,000 sq ft in Regents Place, NW1 and Spaces (Regus) taking a combined total of 150,000 sq ft of new commitments at 25 Wilton Road and 127 Kensington High Street.


The vacancy rate in the West End remains stable at 4% of total stock. Whilst we are not anticipating any rental growth this year it is clear that current and impending supply will not be able to keep pace with existing demand levels and as such a shortage of supply of Grade A office space should result in rental increases moving forward into 2020 and 2021.