Overall West End office rents are forecasted to nosedive by 40.7%

Data from the Society of Industrial & Office Realtors (SIOR) and McCalmont-Woods Real Estate, shared exclusively with Property Week, show that overall West End office rents are forecasted to nosedive from £94.88 sq/ft at the end of 2019 to £56.22 sq/ft by the end of 2021 – a 40.7% drop.

The prime West End office market is expected to fare slightly better, though rents are still expected to crash 38.9% from £115 sq/ft at the end of 2019 to £70.3 sq/ft by the end of 2021.

Overall City office rents over the same period are predicted to slump 34.35% from £58.81 sq/ft to £39.26 sq/ft while overall Midtown office rents are predicted to fall by 24% from £68.06 sq/ft to £51.62 sq/ft.

Overall office rent and prime office rent in the Docklands and South Bank market are also forecast to decline.

Nick McCalmont-Woods, chief executive of McCalmont-Woods Real Estate, said: “As occupiers adjust to the impact of Covid-19 on their businesses and scale back, delay or even shelve some office requirements altogether, we expect the pattern of rental decline from the 2008/2009 great financial crash to repeat itself and, if anything, it may be exacerbated further in the event that significantly more tenant/occupier controlled space is released back on to the market as businesses adopt new working practices in the long-term.”

Paul Danks, director at DeVono Cresa and president-elect of SIOR Europe, said: “As a result of the ongoing pandemic, we expect the lettings market to remain subdued compared with historical levels mixed with increased appreciation for flexible office space. This sudden increase in availability is already prompting a swing in the balance of power back towards the tenant.”