West End office take-up and rents soar as demand remains solid
Offices in the West End have posted the highest monthly volume of space transacted in a month other than December in four years, according to new research from Savills.
Savills researchers said office leasing in August reached 385,463 sq ft, marking the highest August level in six years and the best performance outside of December, traditionally the peak of leasing activity, since October 2018.
Sub-10,000 sq ft transactions continued to drive market activity, accounting for 77% of completions. Overall, 43 deals completed during the month, the second-highest monthly figure since March 2020.
Offices in the West End have posted the highest monthly volume of space transacted in a month other than December in four years, according to new research from Savills.
Savills researchers said office leasing in August reached 385,463 sq ft, marking the highest August level in six years and the best performance outside of December, traditionally the peak of leasing activity, since October 2018.
Sub-10,000 sq ft transactions continued to drive market activity, accounting for 77% of completions. Overall, 43 deals completed during the month, the second-highest monthly figure since March 2020.
Rents have also risen: the average prime rent for 2022 so far stands at £122.70 per sq ft, up 3% on the same period in 2021. Average grade-A rent is £81.49 per sq ft, up 2% on the previous year.
In addition, rent-free periods have started to soften to an average of 22 months in Q3, compared with 22-24 months earlier in the year.
The largest transaction to complete in August, and the first transaction by a serviced office provider so far in 2022 in the West End, was Landmark Space’s 34,921 sq ft prelet of the part-first and part-second floors at Orchard Place, 8-10 Broadway, SW1, on a 10-year lease at £75 per sq ft.
Savills said that despite rising cost pressures, occupational demand continues to remain strong. At the moment there is some 1.5m sq ft of office space under offer in the West End, up 26% on the long-term average.
The largest space under offer to a single occupier is Audley Property Management and Co-Re’s Lansdowne House scheme in Berkeley Square, W1 (pictured). More than 200,000 sq ft is under offer to Blackstone, with contracts set to be exchanged this year.
Hunter Booth, head of Savills’ West End London agency team, said: “Despite headwinds, the summer continued to be busy in the West End as occupiers vied for the limited amount of space available, particularly at the prime end of the market where most demand lies.
“While debates around occupancy levels and the future of hybrid working still rage in some circles, the reality is that many companies are still taking office space, as evidenced by the rise in rents and the decline in rent-free periods. Given that Q4, particularly December, is often the busiest for the West End market, we anticipate a positive end to 2022.”
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Photo © Allford Hall Monaghan Morris
