Quarterly Report July 2025 Q2
West End Market Insights
Q1 2025/26 Real Estate Economic Report.
The latest quarterly data is in, and Heart of London Business Alliance has taken a closer look at how real estate in our area of the West End performed between in the first quarter of this year.
Headline Figures
- Office occupancy rate: 93.2% (up 0.7% on last quarter)
- Commercial occupancy rate: 98% (unchanged)
- Hotel occupancy rate: 85.6% (up 8.1% on last quarter)
Key Trends
1. An evolving office market
London office take-up hit its highest levels since 2019, with Central London activity up 28% quarter-on-quarter. However, flexible workspace — once a driver of growth — is at one of its lowest points in a decade.
In the West End, flexible take-up peaked in 2019 and has since struggled to reach 200,000 sq ft per quarter. Increasingly, landlords are meeting demand for flexibility by offering fully fitted spaces directly, adapting strategies to balance fluctuating attendance levels and the higher cost of borrowing.
2. West End demand remains resilient
Vacancy and availability remain low, supporting rental growth. Market activity was relatively muted this quarter, but supply is expected to tighten further in prime West End locations through the second half of 2025.
Meanwhile, consumer spending rose nationally by 1.8% thanks to warmer weather. Although footfall fell year-on-year in many retail destinations across the UK, the Heart of London area bucked the trend — footfall was 11% higher year-on-year, underlining the West End’s continued appeal.
3. Hotels steady, but room for growth
Hotel occupancy in the Heart of London area averaged 85.6% this quarter — a strong result, though slightly below expectations. ADR (average daily rate) and RevPAR (revenue per available room) declined by 5.1% and 6.2% respectively, broadly in line with wider London trends.
Looking ahead, international visitor forecasts suggest higher volumes in 2025 compared with 2024, which should bolster performance in the months to come.
In summary:
The West End’s fundamentals remain strong. Low vacancy, resilient demand, and a growing draw for visitors underpin confidence in the market, even as landlords adapt to structural shifts in office demand and hotels await the expected uplift in international travel.
Explore more insights and analysis in our full report:
Members can make the most of being in the West End with our reports on audience demographics, footfall, real estate and trends that impact the performance of our area.
