Publication

West End Office: Market Watch - March 2015

Total take-up is currently 18% up on this point last year.

 The strong leasing activity seen in the West End last year has continued through into 2015. February take-up reached 339,392 sq ft, bringing the year to date total to 615,511 sq ft, 18% up on this point last year.

 The majority of transactions have occurred in the <10,000 sq ft size band, accounting for 83% of transactions in February. Over half of these transactions took place in the North of Oxford Street and Mayfair sub-markets.

 The largest transaction to complete in February was the letting of 28,000 sq ft at Michelin House, SW3 to London Executive Offices. Rising demand from serviced office providers is a trend emerging across central London as a whole.

 The highest reported rent to date this year, is £110 per sq ft, achieved at Devonshire House, Mayfair Place, W1 in January. Nevastar Finance Ltd took 3,400 sq ft on the third floor on a 10-year lease.

 Currently, total supply is 4.2 million sq ft, of which 74% is of a Grade A standard. This equates to a vacancy rate of 3.5%. We expect there to be a slight rise in the available supply, with an anticipated 2.4 million sq ft of new developments and refurbishments scheduled to complete in 2015.

 Current demand at 2.4 million sq ft, is the highest since October 2014. Although down by 7% on the 12 month average, this is expected to pick up as the year progresses.

 The TMT sector continues to be the dominant business sector, accounting for 33% of take-up to date. This is followed by the Insurance and Financial Services sector and the Business and Consumer Services sector, which have both accounted for 14% of the take-up.

click on images below to enlarge

Graph 1

GRAPH 1Take-up

Source: Savills Research

Graph 2

GRAPH 2Supply and Vacancy Rate

Source: Savills Research

Table 1

TABLE 1Key February stats

Source: Savills Research 

 

Analysis close up

Table 2

TABLE 2Take-up

Table 3

TABLE 3Supply

Table 4

TABLE 4Rents

Table 5

TABLE 5Demand & Under Offers

Table 6

TABLE 6Development Pipeline

Completions due in the next six months are included in the supply figures

*Average prime rents for preceeding three months

** average rent free on leases of five years for preceeding three months

Table 7

TABLE 7Significant February Transactions

Table 8

TABLE 8Significant Supply

Map 1

MAP 1Savills West End Office Submarkets