Soho office take-up in 2017 exceeded the trend rate in the West End for the second year in a row with a total of 472,700 square feet taken up.
This office take-up in Soho was dominated by two large transactions in the second quarter of 2017. These were the 57,750 square feet let to Palantir Technologies at 20 Soho Square and the 70,600 square feet let to Hearst UK at LSQ Leicester Square. However, activity reduced dramatically in the first quarter of 2018, with just 27,900 square feet of Soho office space being let in this time. In addition, there were no lettings in Soho which totalled more than 3,000 square feet during the first quarter of 2018, with the largest transaction being the letting of 2-3 Golden Square by IT consultancy Workshop Technologies.
This lack of lettings has meant that there has been an increased supply in the Soho office market in the first quarter of 2018 with a large amount of second hand space coming to the market. There was a total of 419,600 square feet available in the first quarter of 2018 with 41% of the availability being Grade A office space. Rental values of Grade A office space remained stable from October 2017 through to March 2018 and are around £97.50 per square foot. This is in contrast to refurbished office space which reduced by 3.8% during this same period and is now valued at £75 per square foot. However, secondary rents did not follow the same trend as refurbished office space, rising in value by 4.8% to reach £55 per square foot.
In terms of size, the vast majority of space taken up in the six months from October 2017 was between 1,000 square feet and 2,500 square feet, accounting for 46% of the total. In addition, there were no lettings recorded between 5,000 and 20,000 square feet in Soho with 20% of office lettings being over 20,000 square feet in size. The business and professional services industry was the largest occupier of Soho office space, accounting for close to half (47%) of take-up in the area. This demonstrates the changes which have happened in the Soho area which has become far more desirable to more corporate firms as rental values have risen. The second highest occupier of space is the design and media industry, reflecting Soho’s traditional preserve as one of London’s leading creative hubs.
If you are looking to make this vibrant area your business’s new home, check out our Soho office listings here or contact one of our dedicated Commercial Advisors.
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