West End rents to rise by 40%: C&W

Property adviser Cushman & Wakefield has forecast that prime West End rents in Londin will rise by 40% between now and 2012 which would mark a return to levels above £100 (EUR 115) per square foot. Lack of supply is expected to lead to a return in pre-letting activity.

Despite the worst level of take-up since 1991, the last quarter of 2009 witnessed 740,000 sq ft (69,000 m2) of take-up in the West End - the highest recorded since Q2 2008.

'Occupiers are beginning to reactivate enquiries in anticipation that landlords will start to take a firmer stance in negotiations throughout the course of 2010,' said Guy Taylor, head of West End office agency at Cushman & Wakefield.

Active demand has also increased quarter-on-quarter, and there has been a 40% upturn in active requirements in the West End over the year. Demand is expected to come from a wide range of occupier types looking to secure space in the West End, with TMT, Financial and Retail and Professional most active. Major active requirements include Bain & Co - 40,000 - 60,000 sq ft, Invensys - 16,000 sq ft and Mirabaud - 25,000 sq ft.

Pressure on rents will initially be driven by the lack of new space coming on stream in the West End. Just over 1 million sq ft is under construction for delivery in 2010 and, beyond that, of buildings over 20,000 sq ft, there are currently only two buildings under construction due for completion in 2011.