Lower Demand Higher Supply Good News Says Agent

LONDON-King Sturge’s West End office report for the first half of the year says that supply is well up while demand has dropped by almost a third. The figures released in the company’s report ‘West End Offices’ show that availability has jumped 45% while take-up has plummeted by 32%.

There is currently over 2.3 million sf of available space in the West End with the figures swollen by three of the largest development sites to come to the market for many years. Following its move to Paddington Basin, troubled retailer Marks & Spencer is looking for partners to redevelop its former headquarters in Baker Street while the Crown Estate has submitted an application for its £500 million ($725 million) redevelopment in Regent Street.

In addition Grosvenor Estate has secured a consent to redevelop the former BP headquarters in Buckingham Palace Road which, with nearly 250,000 sf, will make it one of the biggest office schemes in the West End.

Catherine Jones of King Sturge’s research department said that, despite the levelling of rents and the fall off in letting activity, ‘the market generally remains buoyant. Even though head line rents were down during the second quarter, the trend is still rising with the West End the most expensive business location in the world. We expect moderate, but continued growth for the rest of the year,’ she said.