Exclusive: West End bounces back with rush for fresh office space
The West End has come roaring back to life after firms committed 1.2m sq ft of office space in the third quarter.
A race for space is also heating up, with the post-pandemic renaissance of the capital’s shopping heartland seeing prime rents for offices soar 6.5 per cent in the past year, data from Knight Frank shared with CityA.M. revealed.
Demand across locations like Mayfair and St James has caused headline rents to grow from £100 per sq ft 5 years ago to £125 now.
Financial and professional service firms have led the resurgence across London, which now has a 8.6 per cent vacancy rate for workspace.
One company to ink a lease for new digs in the West End includes Lazard, which yesterday announced it had locked down a new UK HQ at 20 Manchester Square in Marylebone village.
Wall Street investment giant Blackstone has also signed a deal to move its European headquarters to Lansdowne House on Berkeley Square.
The lease on the Mayfair base represents the largest letting deal in the third quarter, with the global asset manager snagging 226,000 sq ft.
Other big deals include law firm Addleshaw Goddard relocating its London headquarters from ilton Gate to 41 Lothbury, taking up 114,000 sq ft, while Forster also committed to a 50,000 new base at 22 Baker Street.
Companies were “increasingly gravitating towards best-in-class offices that meet their ESG criteria and long-term corporate ambitions,” Shabab Qadar, London research partner at Knight Frank, told CityA.M.
However, with inflation constraining a future pipeline of projects, there are set to be delays to planned completions, due to elevated build and labour costs.
It comes as London Mayor Sadiq Khan told CityA.M. this week that the opening of Bond Street’s Elizabeth Line station on Monday will help revitalise a “tired” part of the area.
The area near the new Crossrail station “has been quite tired as you approach Marble Arch, and the fear is the blue chip shops – the John Lewises, the Selfridges – may decide to leave,” he said.
“You’ve got to entice commuters and customers to their shops,” Khan added, after the area has been criticised in recent weeks for a slew of American candy shops that officials believe are being used as fronts for tax dodging.