Mayfair / St James's office rent 12th December 2014

Prime rents in Mayfair and St James’s are higher than they have ever been, following an increase in headline rents during the final quarter of the year, according to commercial property adviser GVA.

Net effective rents as of December 2014 stand at £100.85 per sq ft, with space now as expensive as the corresponding period in 2007, which was the previous high point before the economic downturn took hold.

Prime headline rents have been in excess of the 2007 peak of £110 per sq ft since the beginning of 2014, when they hit £115 per sq ft. However, the substantial incentives offered during this cycle have meant that during 2014 net effective rents were still cheaper than Q4 2007.

With headline rents increasing to £117.50 per sq ft during Q4 2014, it means that the cost of occupying space is now more expensive than ever before. And the fact that rates payable have more than doubled between 2007 and 2014 has further increased the price of occupying office space in the core West End markets. During 2015, prime headline rents are expected to further increase by 6.4% to £125 per sq ft.

Patrick O’Keeffe, Head of London Agency and Investment at GVA, said: “Prime rents in Mayfair and St James’s have remained strong but fairly static over the recent past, with rents outside of the core benefitting from stronger rental growth.

“With the tightening supply of grade A accommodation and new super-prime schemes being delivered to the market in 2015, a new high water mark could be on the cards, exceeding the 2007-high of £140 per sq ft.”