New statistics released today which has given back data in January for West End offices reaching 243,902 square feet, by January 2018 data which came back from estate agency Savills that revealed 56% of space was taken by Tech and Media companies the other 18% serviced offices, 18% insurance companies and lastly 10% of the financial services market.
Real estate for the international markets has shown several different indicators for this year such as growth within serviced office market providers, some grey area availability but also a new commitment for new office development in the West End area, particularly as demand increases.
Serviced office providers totalled 19% at West End in 2017 however in 2018 the landlords are really looking to diversify what they offer by trying hybrid solutions rather than the standard ‘all for one’ serviced office, this does suggest that there is a grey space in the market which allows office owners to apply there own set of rules and develop a market of their own, there is good demand which vacancy current rate being around 4% and spaces being re-let quickly.
More data from Savills also revealed good news for the West End’s development as 1.4million square foot is either being developed or refurbished this brings the total up to 964,617 by halfway point of 2018… Just over 65% is already pre-let.
‘With serviced office providers having expanded quickly and looking to fill their offices over the course of the coming year this is likely to impact landlords in the small suite segment of the West End market, which tends to be concentrated around Mayfair and St James and traditionally appeals to the same type of occupier,’ said director from Savills – Hunter Booth.
‘However, it does force landlords of all size bands to evaluate how they deliver space to the market and how accessible they make this space to occupiers. Speculation over grey space could also impact market fundamentals but the balance of supply and demand that currently prevails in the West End has absorbed this extra space to date,’ he pointed out.
‘A high level of pre-letting reduces the impact of near-term speculative deliveries and keeps supply levels low. Yet while we need to continue operating with caution, there is a strong argument for the delivery of more speculative developments to commence in 2018 that can provide the type of accommodation today’s occupiers have come to expect,’ he added.