Savills found that the average rent was 11% above the levels seen in 2016.
The real estate adviser said that a record rent of £190 per sq ft achieved in March at 5 St James’s Square helped to push the Q1 average prime rent to 11% above 2016’s average prime grade-A rent of £110.41 per sq ft.
Meanwhile, West End Q1 take up reached 1.05 million sq ft, 1% up on Q1 2016 and 10% higher than the 10-year average.
The technology and media sector was found to be the most active in the market, accounting for 22% of the take up, followed by professional services (19%), and insurance and financial services (16%).
- Prime commercial property rents on the rise
- Chinese investors accounted for £805m of West End commercial property transactions
- 20-year high for central London office construction
Key transactions which took place included Conde Nast Publications acquiring the 9th floor at the Adelphi on a 10-year lease at a rent of £79.50 per ft, while the top 9th and 10th floors at Aberdeen Asset Management’s 12 Hammersmith Grove were acquired by Medidata at a sub-market equalling rent of £59 per sq ft.
“The first quarter of the year has seen strong take up and rental levels in the West End, with the deal at 5 St James’s Square helping prime grade-A rents to hit a 10-year high,” said Brian Allen, director of the West End leasing team at Savills.
“While headline rents remain strong, there is some upward pressure on the level of incentives being offered to tenants, with the average rent free period on a 10-year lease now 18 months, compared to the average of 13 months in Q1 2016.
“Nevertheless, the market remains robust.”