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Navigating the Evolution of London’s Mayfair Office Market: Insights from Ashwell London

Introduction: As the dynamics of the commercial real estate landscape continues to evolve, London's Mayfair sub-market, remains at the forefront of the office leasing market. In this blog post, we delve into the latest trends shaping the Mayfair office scene and how Ashwell London is navigating these changes to better serve our clients.

 

The Current State of the Mayfair Office Market: Mayfair has long been synonymous with luxury and sophistication, attracting businesses from various industries. However, recent times have witnessed a shift in the office market dynamics. With the ongoing effects of the pandemic and the implications of Brexit, demand for office space in Mayfair has seen fluctuations. Despite this, Mayfair retains its allure, with prime locations still in high demand.

 

Mayfair's vacancy rate stands at a commendable 6.0%, remaining below the London average and only slightly above its pre-pandemic low. This resilience is a testament to the enduring appeal of this prestigious district.

 

Prime spaces near the new Elizabeth line station at Bond Street have garnered significant interest, with record-breaking rents reported in certain key schemes. While we celebrate this positive momentum, we remain vigilant about potential challenges, such as the conversion of department stores on Oxford Street and New Bond Street into offices, which could introduce some supply dynamics to the northern portion of Mayfair.

 

See Lazari Investments latest mixed use retail and office scheme at 63 New Bond Street, formerly the home of Fenwick. Designed by Foster + Partners, the scheme will deliver world class retail at ground and first floors, best-in-class offices from the second to ninth floors and a rooftop garden on the tenth floor.

 

The project team has identified innovative construction engineering techniques to lift existing façades and structural slabs where possible, to retain and preserve the building fabric whilst aligning the floorplates to suit future occupation. The scheme will retain over 50% of the existing structure and 75% of the historic façades, targeting BREEAM 'Outstanding' and NABERS 5* certification


63 New Bond Street, W1

  

Trends and Insights: At Ashwell London, we closely monitor the trends influencing the Mayfair office market. We've observed a growing interest in flexible workspaces and hybrid office models, as businesses prioritise agility and adaptability. Moreover, sustainability and wellness considerations are increasingly shaping tenant preferences, with eco-friendly and wellness-centric office spaces gaining traction. In recent times, we've witnessed landmark leasing transactions, such as Millennium's signing 175,000 sq ft on the West End's largest transaction of 2023 at 50 Berkeley Street, along with luxury retailer Chanel securing 86,000 sq ft of newly developed space in May of the same year, at 38 Berkeley Square, c.3 years ahead practical completion. These transactions, among others, have propelled take-up to a five-year high, showcasing the enduring magnetism of Mayfair for esteemed corporations.

 

It is noteworthy that sublease availability has dwindled to historically low levels, currently standing at around 10% of total availability. This trend, coupled with ongoing refurbishments of buildings on Berkeley Square, underscores the sustained strength of the market.

 

38 Berkeley Square, W1

 

Ashwell London's Response: In response to these trends, Ashwell London remains committed to providing tailored solutions to our clients. We understand the importance of flexibility in today's dynamic environment and offer a diverse portfolio of office spaces designed to meet varying needs. From traditional offices to coworking spaces and serviced offices, we strive to offer options that align with our clients' evolving requirements.

 

We recently brought to the market 52 Conduit Street, alongside our joint agent, Knight Frank, three fully fitted and furnished floors. We have now let all three office floors immediately upon Practical Completion of refurbishment works at rental levels at quoting terms and above, to world leading corporates.  



The West End pre-leasing market has never been as strong and Ashwell London is at the forefront of this frenetic activity. Alongside our success at 52 Conduit Street, we have just concluded the letting of a further 17,000 sq ft at Derwent London’s latest and most significant office scheme in Marylebone’s, 25 Baker Street. Practical completion of works is due Q1 2025, and we have pre-let marginally under 85% of this impressive 200,000 sq ft scheme. In tandem with this, we are acting for two significant investment funds with a total of £75bn under management, where we are in negotiations to acquire c.18,000 sq ft in an off market St James’s scheme ahead of practical completion, which takes place in Q4 this year

 

Looking Ahead: As we look ahead, Ashwell London is poised to continue our journey of innovation and client-centric service. We remain dedicated to staying ahead of the curve, anticipating market trends, and adapting our offerings to meet the changing needs of businesses in Mayfair and beyond. With a focus on excellence and integrity, we are confident in our ability to navigate the evolving landscape and empower our clients to thrive.

 

Conclusion: In conclusion, the Mayfair office market is undergoing a period of transformation, presenting both challenges and opportunities for businesses. At Ashwell London, we are committed to serving as a trusted partner to our clients, offering expert guidance and innovative solutions to help them achieve their goals in this dynamic environment.

 

Whether you're seeking premium office space in Mayfair or strategic real estate advice, Ashwell London is here to assist you every step of the way.

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