The construction of new office space in London's West End has shot up dramatically over the course of the last three months, with more construction of new offices to let underway than any time for over two years. The most recent Drivers Jonas Deloitte Crane Survey has seen more new projects for the construction of new office buildings in the West End than it has ever previously recorded, with 13 new schemes underway that will bring almost two million square feet of new office space to the area. This is an indication that developers may have recognised the distinct lack of Grade A office space in the district and are now looking to cash in by correcting this.
"Only 15 per cent of the space currently under construction in the West End is in Mayfair - it is still the place to be, and for the hedge funds and others paying a very high rent per square foot, this is really not a problem as the unit sizes are small," says the head of transactions at Drivers Jonas Deloitte, Matthew Elliott. Some units of a very high quality in the district are already charging rent of £90 per square foot, a rapid increase, considering the same locations were charging just £65 per square foot at this time last year. "We expect rents to continue to rise over the next two years as occupiers are forced to compete for the reducing supply of top quality space," says the company's head of research.
