Real estate eyes 2025 as London’s big reset

With a tough near-term outlook, real estate players are hoping 2025 will prove to be the London market’s next landmark year. BNP Paribas Real Estate has pegged 2025 as the year the West End office market will “reset” after major leasing events next year and in 2024. Some 40% of West End occupiers have lease expiries or breaks in 2023 and 2024, the firm said, with a “flurry” of deals then expected to “alter the market as we know it by the milestone year”. That could drive rents on prime buildings from £140 sq ft now to £200 sq ft in 2023, £250 sq ft in 2024 and then higher still. Simon Knights, head of West End agency at BNP Paribas Real Estate, said: “You might think the confluence of global geopolitics and the challenging economic outlook the UK faces would shake the nerve of the hardiest optimist, but not the core West End occupier. They are moving ahead with their growth plans. “Having capitalised on Covid by moving out lease events, they are now growing their businesses to take advantage of their industry growth… If 2022 was a landmark year in seeing rents of £150 being carelessly tossed around as commonplace, then 2023 and 2024 will be seen as milestones in resetting the leasing market into 2025 and the years to follow.” In Deloitte’s latest London Office Crane Survey, published earlier this week, the firm said 2025 will be “the ‘year of the investor”’. Margaret Doyle, chief insights officer and partner for financial services, said that year will likely be one in which “renewed pressure on stock stimulates rental growth, creating a wave of fresh opportunities for developers”. To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews Image © Verena Obermaier/Pixabay See which agents are the most active in London >>