Take-up stands at 3.1m sq ft, with a further 0.9m sq ft under-offer

Supply and demand snapshot

■ 252,774 sq ft of take-up was recorded in August across 38 transactions.

■ August's take-up brought total 2017 take-up to 3.13m sq ft, 24% above the same point in 2016 and 29% above the 10-year average.

■ Similarly, the 12 month rolling take-up in the West End is 4.57m sq ft, 31% above the long-term average (Graph 1).

TABLE 1Key August stats

^{Source: Savills Research}

GRAPH 1West End 12-month rolling take-up

^{Source: Savills Research}

■ British Land let 60,810 sq ft to three tenants at 4 Kingdom Street, W2. Mars acquired the 6th and 7th floors (30,304 sq ft), Vertex acquired the 8th floor (15,253 sq ft) and Sasol the 9th floor (15,253 sq ft), the 5th floor remains under-offer. The average rent of these transactions is understood to be £71.00 per sq ft. British Land plan to use the remaining 4th floor for their flexible workspace brand Storey.

■ Elsewhere, Anadarko acquired the 7th floor totalling 21,500 sq ft at Nova North, SW1 on a 10-year lease at a rent of £77.50 per sq ft. Following the transaction,140,000 sq ft remains available at the development.

■ 104,606 sq ft went under-offer in August, bringing the total amount under-offer to 902,735 sq ft, which is 50% above the long-term average.

■ Following August's transactions, the Tech & Media sector remains the most active business sector in the West End, accounting for 27% of 2017's take-up. Serviced Office Providers have been the second most active accounting for 22%, with the Insurance & Financial Services sector third at 12%.

■ Total West End supply fell 1.4% in August to 4.85m sq ft. This resulted in the vacancy rate falling 10bps to 4.0%. 75% of supply is of a Grade A standard while 27% in tenant controlled (Graph 2).

■ Despite just 1% of transactions being >100,000, deals in the size bracket have accounted for the greatest volume of take-up at 23%. This is followed by transactions of 5-10k sq ft (17%) and 15-25k sq ft (15%) (Graph 2).

GRAPH 2West End supply

^{Source: Savills Research}

■ There is just 123,000 sq ft of development and extensive refurbishment completions scheduled for Q1 2018, of which 25,000 sq ft has already been pre-let. The 98,000 sq ft of speculative completions will be added to the supply pipeline next month.

■ The average Grade A rent at the end of August was £80.48 per sq ft, 4% above 2016's average Grade A rent of £77.25 per sq ft. In contrast, the average Grade B rent was £59.43 per sq ft, 3% below 2016's average Grade B rent of £61.07 per sq ft.

■ We are currently tracking 6.4m sq ft of West End & central London requirements, 4% above the 12-month average.