The volume of office space taken across the core Central London markets of the West End and the City rose 1% in 2024 to 10.1m sq ft, according to new data from Savills. The number of transactions increased 3% in 2024 compared with the previous year.
Leasing activity in Q4 reached 3.17m sq ft – up 16% on Q3 2024 – and in the final quarter of the year, the office vacancy rate fell to 7.5%, with supply at the year-end standing at 19.6m sq ft.
Active demand from occupiers for space at the start of Q4 2024 stood at 13.5m sq ft – up 44% on the long-term average. Savills’ data indicates that the majority (48%) of active occupiers are seeking to increase their space, compared with 21% of occupiers who are seeking to reduce their space.
The average Grade A office rent in the City hit £70.51/sq ft, a 2.8% increase on 2023, while prime City rents rose 7.5% to £98.60/sq ft. In the West End, average Grade A rents remained broadly stable at £94.87/sq ft, and the average prime rent was £157.15/sq ft.
Josh Lamb, director in Savills’ City office agency team, said: “It’s great to start 2025 on the back of a strong year, with provisional 2024 stats for the City indicating take-up rose 22% up on our market’s five-year average at 6.54m sq ft. With increased costs and fewer options available across both the City and the West End, we are confident that 2025 will see further rental growth on the very best offices, while some occupiers will have to compromise either on the quality of the office stock they are seeking or consider non-core locations.”
Hunter Booth, director in Savills’ West End office agency team, added: “With take-up closing at 3.56m sq ft in 2024, the West End market was marginally up on 2023, albeit slightly down on the five-year average, most likely stymied by occupiers’ caution in making final decisions about their space. We anticipate that many of the reasons which drove this hesitation will ease across 2025 and we will see increased impetus to move in a low-supply environment.
“This is born out by West End demand being 9% up on the 10-year average. In addition to this, 20% of West End development scheduled in 2025 is already pre-let with lower supply coming through in 2026/27, so occupiers will feel the pressure to transact on the space that remains available in this year’s pipeline. This should drive robust rental growth this year both for prime and Grade A space.”
