Oxford Street is on the brink of a “generational change”, according to Savills, with 1.32m sq ft of new office space proposed for delivery in the next five years around on and around one of London’s most famous retail locations.
Savills’ analysis reveals there is an opportunity to covert former retail space into 960,000 sq ft of new office space. This is in addition to key schemes already in the pipeline along Oxford Street such as Sirosa’s 163,000 sq ft at Emporium, Henrietta Place (former House of Fraser store), which will be available from Q3 2024; Ramsbury & Capital Real Estate delivering 280,000 sq ft at the former Debenhams store at 334 Oxford Street, which will be ready in Q4 2024; Derwent London has been granted planning permission for 150,000 sq ft at Holden House 54-68 Oxford Street, which is expected to be delivered in 2027; and 80,000 sq ft is being delivered by M&G at the former Next store at The Ribbon, Wells Street, which will be completed in H1 2024.
The consultancy group says live requirements of 100,000 sq ft and above in the area have “never been higher” with Condé Nast and Evercore both in the market for space in addition to other occupiers.
The soaring demand for space is against a backdrop of vacancy rates in the central West End sub-markets surrounding Oxford Street falling to just 5.1% compared with the overall West End vacancy rate of 6.1%, with only nine Grade A options available in the area for requirements north of 25,000 sq ft.
Andrew Wedderspoon, director in the West End office agency team at Savills, said: “The very best offices today not only offer cutting-edge design but also strong locations on account of connectivity and transport links and a proximity to amenities and leisure spaces. Oxford Street is already globally recognised as a leading retail and leisure destination and its location lies at the heart of Central London.
“While the area has been hard to imagine as a genuine office sub-market until now, the sheer volume of space available for conversion is a once in a generation moment to transform the street and attract those larger occupiers who may otherwise be pushed out of the West End due to a lack of opportunity.”
Sam Foyle, co-head of prime global retail at Savills, added: “High streets up and down the country are evolving to be far more mixed use and Oxford Street is no different. Where department and retail stores are no longer fit for purpose, there is an opportunity to repurpose shopping streets, to breathe new life into older buildings, bring in new users and drive up footfall that will benefit the retailers that continue to operate in the area successfully.
“”It also creates new opportunities for retailers and leisure operators to pivot to meet new demand from the after work market that will increase with more office occupiers in the area. All of this creates greater vitality and an ever more appealing destination to visit – whether for work or play.”
