There is a growing number of flex space providers in the West End that operate agile alternatives to leased office space. These have become increasingly popular post-pandemic as occupiers seek out shorter leases on offices that provide great amenities and environmental credentials.
Read the profiles of the providers of Flexible Workspace in the West End
Despite an overall drop in demand for office space, the West End has remained inured against the tough economic times, Derwent said; however, they added that whether this would continue in the second half of 2011 was unclear.
Derwent London Chief Executive John Burns told Reuters: “We would have noticed deals going through slower and companies not signing leases, but that is not happening at the moment.”
In the first six months of this year, the company recently reported that Derwent’s net asset value rose by ten per cent.
So far, London has been ‘insulated’ from the economic turmoil around the world, Burns added. However, he said that this could easily change.
Derwent was the only FTSE-350 company to refrain from raising equity this year. Its net debt has risen recently, though, from GBP 749.2 million last year to a current level of GBP 904.5 million.
Burns said of Derwent’s holdings: “There was robust rental growth across the portfolio, which reflected the continued strength of the central London office market and the buoyant demand for our particular brand of contemporary, mid-market space.
“Looking at our current letting enquiries and activity, this rental value progression appears sustainable over the near term. In addition, with our low average office rents at GBP 25.82 per square foot in central London and GBP 27.16 per square foot in the West End properties, these levels offer good prospects for growth in the supply-constrained occupier market.”
While the property market in London may be healthy, across the rest of Britain, both commercial and residential markets are struggling.
UK house prices fell in August for the fourth month in a row, and according to property researcher Hometrack Ltd, demand for housing may become even weaker as the year continues.
Editor’s notes: In 2022, prime office rents in the West End reached £130 per square foot per annum.
That year’s total office space take-up was 4.1 million square feet, which was 7.9 per cent higher than the 3.8 million square feet taken up in 2021.
In Q4 2022, overall demand in the West End stood at 4.7 million square feet, a rise of 6 per cent quarter-over-quarter.
However, total office space under offer fell over the quarter to 707,000 square feet at the end of 2022, representing a 44 per cent decrease compared to Q3.
In January 2025, Derwent announced that all 204,300 square feet of office space at its 25 Baker Street development in the West End was fully pre-let to five tenants.
Rents across the building ranged from £98 to £113 per square foot, with £104 per square foot being the average.
Across the five office leases, the weighted average lease term (to break) was 13.5 years, with over 70 per cent providing 15-year terms certain.
The signing of the final two pre-let deals took the office to an annual rent roll of £21.2m, with the completion of the West End building penned for later in H1 2025.
In September 2025, it was reported that Derwent London had completed £13.8m of leasing, renewals and regears in the first half of the year, creating H1 profit before tax of £94 million compared with a loss of £27.2 million in H1 2024.
The company reported a total property return for the half-year of 3.1 per cent, outperforming the MSCI Central London Office Index’s 1.9 per cent.
A spokesperson for Derwent London said, “Demand [is] well above the long-term average and [there’s] a significant supply shortage at the top end… Central London office rents are growing and values continue to recover,” Derwent said.
Derwent added that prime rents have risen 10 per cent in the last year as top firms compete for best-in-class space amid a flight to quality in the market.