The office-letting market in London has been off to a fantastic start this year, the best it has been since the financial crisis struck several years ago. This is due to a booming demand for commercial property in the nation's capital and with this demand comes rental increases, leading to record-breaking rental rates in the West End.
According to Cushman & Wakefield, one of the leading London commercial property agents owned by the billionaire Agnelli family, more than 2.4 million square feet of office space was tenanted in the first three months of 2015. This has seen letting activity in the prominent business district quieten significantly as vacancy rates have been pushed down to 2.3%.
The demand for commercial space has led to an acute shortage of space in the city which has led to the record-breaking rents. The most notable example is the reported £185 a square foot the Nahmads paid for their private family office on the top floor of Green Property's development at 8 St James's Square.
However, it is Deloitte, the professional services firm, that has struck the biggest deal so far, by agreeing to a 270,000 square feet pre-let at 1 New Street Square, EC4. This landmark deal alone pushed commercial property lettings in the City of London 34% ahead of the same time last year.
"It is clear that rising rents and scarcity of product are leading to a redistribution of occupiers across central London, particularly West End occupiers," says Andy Tyler, head of C&W's West End office agency.