Market snapshot

Office Market Pulse Central London Q4 2014

Central London experienced the highest take up since 2006 with vacancy rates across the West End now falling to a low of c. 3.3%. Rents continue to rise across all sub-districts of the West End fuelled by office stock levels being at their lowest since 2007.

With Mayfair setting the top rents at £115 per sq ft, higher rents are being recorded on one off transactions like the rumoured £150 per sq ft in 30 Berkeley Square being paid by Trafigura and £120 per sq ft at 33 Davies Street paid by Troy Asset Management.

The dominant business sector throughout 2014 was the TMT sector accounting for c. 29% of total take-up and a most recent example is the acquisition of 31,600 sq ft at 10 Bloomsbury Way, WC1 by Criteo.

High rents were also achieved in other West End sub-districts; in Victoria, Jupiter Asset Management reportedly paid £84 psf on the prime floors at the Zig Zag building.  It acquired 56,000 sq ft at the Victoria Street scheme 10 months ahead of completion of the 233,000 sq ft mixed use development. KPMG is reported to have paid a headline rent of £125 psf to pre-let 40,000 sq ft at 20 Grosvenor Street, W1 and London Executive Offices have reportedly paid £100 - £107.50 psf for 23,700 sq ft at 23 King Street, St. James’s, SW1.

With limited supply expected throughout 2015, we expect an increased upward pressure on rents and this trend will continue through to early 2016.

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In this issue:

Key transactions in Central London Q4 2014


Size (sq ft) 

Landlord(s)/ vendor


Lease information (per sq ft)

1 Bank Street, E14 280,000 Canary Wharf Group Societe General  £47.50
6 Pancras Square, N1 205,000 AXA Real Estate Google Confidential
39 Victoria Street, SW1 90,000 British Land The Parliamentary Estate Let quoted £67.50
Zig Zag Building, SW1 87,488 Land Securities TBC Guide low £80's
2 Kingdom Street, W2 76,000 British Land Microsoft Under offer
70 Mark Lane, EC 68,250 Mitsui Fudosan Zurich Insurance Confidential
Zig Zag Building, SW1 56,357 Land Securities Jupiter Asset Management £84.00
2 Kingdom Street, W2 50,000 (7th & 8th floors)   British Land TBC  Quoting £55.00 
296 Regent Street, W1 37,700 Great Portland Estates Richemont Confidential
10 Bloomsbury Way, WC1 32,000 London and Regional Properties Criteo £69.76
5 Merchant Square, W2 28,000  European Land Avanta Under offer
Cannon Place, EC4  24,750 Hines  12 Offices  Confidential 
20 Fenchurch Street, EC3 23,800  Land Securities & Canary Wharf Group  Vinson & Elkins  £69.50 

2 Kingdom Street, W2

23,000 (9th floor) British Land  TBC Quoting £55.00
1-5 Howick Place, SW1 20,000  Terrace Hill Group  Edelman UK  £63.00 
10 Portman Square, W1  18,500  British Land  Ontario Teachers Pensions Plan  £87.50 
62 Buckingham Gate, SW1 12,000  Land Securities  Kering  Guide £70.00 Terms Confidential 
10 Portman Square, W1  10,250  British Land  Ardagh Glass  £87.50 
30 Berkeley Square, W1   TBC Phillips  Confidential  £150.00 
Source: Lambert Smith Hampton

Central London office rents rise

  • There has been a steady rise in rents across Central London submarkets in Q4 2014 when compared with Q4 2013, as supply continues to fall.
  • Mayfair and St James's rents hit £115 per sq ft.  

Heads of Terms (HOTs)

HOTs are commonly drawn up by the landlord and tenant’s agent setting out the terms of the proposed agreement and are then used by the landlord’s solicitor as a template to draw up the lease. Negotiations to agree HOTs can take some time and they do not deal with every aspect of the proposed lease but they should set out the significant parts.

There is a Code for Leasing Business Premises approved by the British Property Federation, the Law Society and other institutions which contains requirements for HOTs by landlords adopting the Code but its use is voluntary and many leases which do not incorporate it are nevertheless approved.

With the current market conditions and the need to negotiate competitive terms, clients rely upon their agents to cover as many initial points of the lease as possible prior to instructing lawyers, as this will be the optimum time to leverage best terms.

Download a HOTs guide here.


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David Earle

020 7198 2270

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David Earle
Head of Central London Office Advisory

020 7198 2270

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