Derwent London says ‘buzzing’ West End helps 2023 lettings pass last year’s total already
London’s West End is buzzing and demand for office space that allows returning workers make the most of their days in the capital means major landlord Derwent London has let more space so far this year than it did in all of 2023.
The FTSE 250 real estate investment trust said today it signed 10 leases since the start of the wort almost £15 million in rent. That compares to agreements worth £10 million struck last year. The fresh deals included the first pre-let at 25 Baker Street, to bond market investment powerhouse PIMCO and the third major tenant at the Featherstone Building near Old Street, Buro Happold, the global engineering consultancy.
Paul Williams, the chief executive of the FTSE 250 real estate trust, told The Standard that the West End property market “is very, very tight”, amid a “flight to quality” for offices, while retail demand has been transformed by the Elizabeth Line.
“The vacancy rate is the West End is low, at 3.7% and occupiers are looking further out for pre-lets. We are seeing people committing to the West End for good, long leases.
“People coming into offices want to have an experience. They want to be in a cool area, with restaurants, retail and theatre. People want to come to work and experience more than just working and that is good for London, and particularly for the West End.”
He added that the Elizabeth Line had been a “game-changer”, helping enquiries for retail sites around stations pick up “quite dramatically”. While the arrival of the east-to-west transport artery was “a long way coming”, Williams added: “We’ve had to be patient for it, but it’s well worth it, it’s fantastic”.
Derwent’s financial results for 2022 showed a loss of almost £280 million, from a profit of over £250 million the year before, in part due to property revaluations.
But it remained confident amid signs of improvement. “The West End is buzzing, London is very busy,” said Williams.