Super prime West End office rents could hit a record high of up to £300/sq ft by December next year as occupier demand for high-quality stock continues to outstrip supply, according to the latest data from BNP Paribas Real Estate.
Prime West End rents currently stand at £150/sq ft – up 7.1% year-on-year – but BNP Paribas Real Estate says a number of deals have completed this year at significantly higher levels at buildings like 65 Davies Street, W1 (£185/sq ft), 38 Berkeley Square, W1J (£180/sq ft), Lansdowne House (pictured) in Berkeley Square (£175/sq ft) and 75 Grosvenor Street, W1K (£170/sq ft).
According to BNP Paribas Real Estate’s data, at the end of Q3 2023 the West End vacancy rate was just below 6% and in Mayfair and St James’s the Grade A vacancy rate stands at around 3%.
Simon Knights, head of West End agency at BNP Paribas Real Estate, said: “You don’t need a crystal ball to see where the super prime West End office market is headed. We predicted last year that leasing events, business growth plans, and the importance of employing talent would drive the market and all the cynics accused us of being terrifyingly optimistic, and look, we’ve seen rents of over £200/sq ft regularly discussed on prime buildings.
“Banking and finance occupiers in particular continue to steer the direction of the market. This activity has seen footprints rocketing in size and discussions around super prime rents move to new heights as the grapple for space becomes increasingly more heated and competitive.
“My prediction, based upon this activity, is that we could see rents reach highs of up to £300/sq ft by December 2024 as this demand continues to prove the naysayers wrong that believed the end is nigh for the office sector. These occupiers seeking out these new premises are less concerned by physical occupancy and are more much enlivened by location, talent, status and growth.”
