West End office space rental falls

It seems that West End Office Space in not impervious from the effects of the global economic slow down.

Whilst many had observed the West End continuing to perform despite the pressures, it seems that the credit crunch in finally starting to bite.  CBRE are reporting a 3.2% fall in rental values in the West End office market, with prestigious areas such a Mayfair and St James falling 4.2% to £115 per square foot.

In recent years the West End has been popular with private equity and hedge fund companies, who seek premium office space in prestigious locations.  However, while the City office market has been contracting in the past year, the West End had hitherto been holding up rather impressively.

But take-up levels are now falling with demand leveling out to the same rate as the rest of central London.  The amount of unused office space in the West End now stands at over 5 million square feet, with Q3 2008 being the worse quarter for 3 years.

Despite the fall in rental values, the West End of London is still comfortably the most expensive area of the globe to rent office space.  But the fall is to be expected, particularly given the lack of liquidity in money markets, making it presumably very difficult for companies to acquire funding for investments.

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