Slowdown Hits Victoria Office Market

LONDON-Prime office rents in Victoria are falling, demand is weakening and supply levels increasing according to new research from Cluttons. But the agents insist that the area still offers the greatest short- to medium-term growth potential of all the West End office markets.

Top rental values fell slightly in the last three months from £57.50 ($81.65) to £54 ($76.70) per sf. Just 214,042 sf was let during the quarter, and total available space increased by 34% to 404,640 sf. However, at just 2.4% of total stock this still represents an historically low vacancy rate.

And overhanging the market is a very full development pipeline, with 1.5 million sf of space with planning consent. However, Cluttons believes that over-supply is unlikely as most of this space is due to be completed gradually over the next two to five years.

Melanie Bayliff, research analyst with Cluttons’ Central London business team says: ‘Prime West End property is looking fully priced at present and Victoria is increasingly being chosen over traditional core West End locations as it offers the greatest growth prospects for potential investors.’