Growing shortage of West End office space: C& W

The limited availability of good quality space in London's West End is becoming critical, according to Cushman & Wakefield, the global property consultant.

With demand expected to pick up, largely due to more than 11 million square feet (1.02 million m2) of lease events taking place across the West End in 2011-13, upward pressure on rents will get stronger and pre-lets will become more common.

With no significant development completions in the West End this quarter, total supply fell by more than 10% over the first quarter of 2011. Central London supply levels stood at 18.1million sq ft at end-March 2011, a fall of 4% year-on-year.

West End take-up activity in the first quarter was just under 600,000 sq ft. Building on trends seen in 2010, TMT was the most active sector accounting for 45% and Soho & Covent Garden was the most active submarket, in the West End. Total take-up across central London was 1.32 million sq ft.

Rents around £100 (EUR 113) per sq ft are becoming commonplace in Mayfair & St James’s as a number of niche financial players continue to take space, and there is no sign of rents slowing down in the short term. City rents have remained stable at £55 per sq ft.

Guy Taylor, head of West End Offices, Cushman & Wakefield, said, 'This market in the West End is being driven by a lack of choice of good quality space due to the lack of development since the beginning of the recession. Take-up is being driven by lease events more than expansion and the TMT and financial sectors are pushing the market forward.'