London’s Victoria has undoubtedly come a long way in the last 10 years. The area is now the chosen location of a diversified and eclectic mix of office occupiers, including Deutsche Bank Asset Management, Jimmy Choo and Pret a Manger. Occupiers are attracted to the area by the high quality office stock, good value rents and rates, proximity to a major rail hub, a choice of Tube lines and the option to walk across the parks to St James’s and central London.

Between 2010 and 2017 rates in Victoria only ticked up by 3.2 per cent, which further incentivised occupiers to move in. However, unsurprisingly, the resulting influx of businesses to the area saw rents rise quickly as the current supply of space was eroded. So what next for Victoria? How will it continue to develop and evolve to ensure other areas don’t catch up or draw occupiers away?

First some context on how Victoria sits in the picture of the wider West End market. The vacancy rate in Victoria dropped steadily from around 9.5 per cent in Q3 2016 to 4.0 per cent in mid-2018 to be broadly in line with the West End average. At the start of 2016 there were big questions about the sheer volume of space being delivered, principally in the Nova North and South buildings and Verde SW1. Steadily, the space filled up and Victoria is now as undersupplied as most other prime London sub-markets. This has kept rents at a good level while, importantly, remaining below the overall West End average – £65 sq ft vs £75 sq ft respectively.

Looking forward, Victoria is set to expand eastwards towards Westminster along Victoria Street. St James’s Park Tube station provides a useful link between the busier stations of Victoria and Westminster and there are several strategic sites along this route.

The first of these is London & Oriental’s Buckingham Green, launching this month, which provides 55,000 sq ft of Grade A office space, 11,000 sq ft of retail and 64 luxury apartments. The development is located between the easternmost holdings of Landsec (62 Buckingham Gate) and Northacre’s former New Scotland Yard site, The Broadway, which will comprise 285 apartments and 140,000 sq ft of office space by 2023.

On the south side of Victoria Street, opposite Buckingham Green, is Standard Aberdeen’s 71 Victoria Street, with planning for a two-storey extension to provide around 38,000 sq ft. Finally, 4 Victoria Street looks like it will be delivered as a refurbished scheme at the end of 2020, totalling 140,000 sq ft.

All of these developments will, in totality, bridge the currently underwhelming journey from Victoria to Westminster and secure the ongoing success of the area as a leading sub-market in central London where people want to live, work and relax.

A note of caution though: building great office schemes is one thing, but what happens at ground-floor level will be essential to bringing the right occupiers in to really make the area come alive.

Further information

Read more: West End Office Market Watch