The West End market sets the standard for Central London. Take up in the W1 & SW1 postcodes totalled around 1 million sq. ft. in the third quarter, taking the figure for 2007 to 2.5 million sq. ft.
One deal stands out, at the end of September, hedge fund Permal Investments signed up for 18,500 sq. ft. at the old MEPC headquarters at 12 St James Square. The rent was ?140 per sq. ft., the highest office rent in the world!
Availability in the West End fell slightly to 2.7 million sq. ft. in the third quarter. This represents yet another low point in the current cycle that peaked at nearly 8 million sq. ft. at the end of 2004.
The £140 Permal deal is likely to be the high water mark for West End rents in this cycle. Prime rents have risen fast in the West End but the rate of increase has started to slow. Prime rents stand at some £110 per sq. ft. Average rents for new or refurbished space stand at £46.00 per sq. ft. while secondhand space comes in at £42.60 per sq. ft.