I was just saying....

THE RISE OF THE £100 per sq ft LETTING

Our latest research covering the West End Sub Markets has just been launched and one notable stat the we have reported on is that five out of the six regions are now registering prime rents of £100 psf or above – a first for the West End market.

It’s true to say that both Mayfair and St James’s have recorded prime rents of above the £100 psf threshold for more than a decade now, but most of the other sub markets have not breached the benchmark, not that is, until the last quarter. As of the end of Q3 2024, five of the six sub markets in our latest Report have prime rents of at least £100 psf, with only Covent Garden still below that level.

The latest sub market to join the ‘£100 psf Club’ is Fitzrovia, which gained membership on the back of several notable deals – the assignment of 80,625 sq ft at Meta’s former HQ at Rathbone Square and Associated British Foods pre let of 31,420 sq ft at The Fitzrovia on Tottenham Court Road.

So with most of the markets now at or above £100 psf, I guess the question has to be asked ‘How Many Deals are Actually Agreed above this Level?’

Well, we’ve done the work and in the year to date 78 lettings across our West End region have been agreed at £100 psf or above, that’s 17% of the all deals that have been completed in the first nine months of this year and amounts to some 510,000 sq ft of space leased. This compares to 14% (670,000 sq ft) of deals for the whole of last year and 10% in 2022 (365,000 sq ft).

Of course, there are some considerable differences across the various sub markets and both Mayfair and St James’s have seen 37% and 17% of all deals in the year to date agreed above the £100 psf threshold. The St James’s figure for this year is a little bit of an anomaly and, unlike the other sub markets, is lower than last year, when the rent agreed on 30% of all deals was above £100 psf.

The largest deal to be signed above £100 psf was BDO’s pre let of 220,000 sq ft at the repurposed former Debenhams building on Oxford Street. A further 58,000 sq ft remains available on the top three floors of the new M Building.

With supply getting tighter in both the Mayfair and St James’s markets, we are expecting the proportion of deals agreed in excess of £100 psf to continue to grow over the next 12-18 months as tenants continue to vie for the best space.