December take-up reached 654,769 sq ft across 54 transactions. This was the highest monthly take-up for December in almost 10 years and helped boost year-end take-up to 4.4m sq ft, beating our initial expectations for the year. Whilst take-up for 2019 was down 13% on 2018’s near record level, it was still up 12% on the long-term average of 3.9m sq ft.

The largest transaction to complete in December was L'Oréal’s pre-let of 120,217 sq ft at Stanhope & Mitsui Fudosan’s Gateway Central development, W12, White City, on terms which remain confidential at present. This was the third largest transaction we saw complete over the year and brought the overall annual volume of pre-lets to 1.2m sq ft.

The second largest transaction that completed during the month was the assignment of the 4th, 10th to 12th floors at the Zig Zag Building, SW1, taken by financial firm Neuberger Berman.

In total, whilst the Tech & Media sector continued to account for the largest proportion of take-up at 25%, space let to Insurance & Financial sector occupiers reached a near record level of 910,000 sq ft. This is the second highest take-up to this sector on record, only narrowly overtaken by 2007’s 920,000 sq ft total.

Over the past three years we have seen year on year increases to the overall sq ft acquired by Insurance & Financial sector occupiers. In total the sector accounted for 22% of annual take-up, which is the highest proportion of annual West End take-up this sector has ever accounted for (see below).

Current levels of demand from the Insurance & Financial sector virtually mirror the levels of sector take-up we saw during 2019, with the sector accounting for 21% of Central London wide and West End specific requirements. As a result we expect to see continued strong levels of take-up during 2020 from the sector.

Mindspace’s acquisition of 34,500 sq ft at the Metro Building, W6, in December, saw the total amount acquired by the Serviced Office Provider sector reach just shy of 700,000 sq ft for the year, which accounts for 17% of take-up. This is down 29% on the average amount we have seen taken by the sector in the West End over the past two years and is in contrast with the City, which saw serviced offices take-up more space than any other occupier type.

Underlying demand continues to remain robust with active Central London and West End requirements at the end of December stood was 4.2m sq ft. Space under offer at the end of the year stood at 1.4m sq ft, remaining up on the long-term average and we expect to see strong leasing activity over the start of this year as a result.

Total West End supply rose at the end of the month to 4.9m sq ft, which equates to a vacancy rate of 4.4%. Just under two thirds, (63%), of the development pipeline for 2020 has already pre-let and only around 300,000 sq ft of speculative deliveries are expected for the second half of 2020.

At the end of the year the average prime rent achieved stood at £116.83 per sq ft, up 11% on the previous year, whilst the average Grade A rent stood at £77.26 per sq ft, up 4% on the previous year.

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