21 March 2024

• Between December 2023 and February 2024, the Heart of London (HOL) area witnessed record-high office space occupancy of 96.1% according to the latest real estate insights report, signalling increasing market demand and stressing the need for new urban development initiatives.
• Despite limited availability, retail space in the HOL area remains in high demand, with occupancy standing at 97%, highlighting the area’s resilience and attractiveness to retailers.
• Hotel occupancy rates have surged to 79.4%, the highest since pre-pandemic levels, highlighting the HOL area’s strong recovery in the hospitality sector and its role as a premier destination for travellers and tourists.
• Landsec’s Lucent scheme emerges as a flagship development, offering premium office spaces and retail symbolising the area’s commitment to innovation and urban renewal.
• Increased spending and transactions in Q4 2023 reflect consumer confidence and business resilience, driving economic growth and vitality in the HOL area.

We have released our latest Real Estate Insights Report which tracks the economic performance of the Heart of London and the significant contribution it makes to London and the wider UK economy.

The report provides an important insight into the performance of the real estate sector in the West End between December 2023 and February 2024.  It outlines how the real estate market in these West End districts has continued to demonstrate resilience and growth in the face of changing market dynamics and limited availability.

The continued high demand for space in the Heart of London is underlined in the report by a 96.1% occupancy rate for office space in the area. This is a record high rate since CoStar records began in 2005 and a significant increase from the 93.7% occupancy rate recorded in Q1 2023. These record figures strongly demonstrate the West End’s continued attractiveness to businesses seeking premium office spaces in vibrant places.

Similarly, retail space is in high demand, with occupancy rates for retail space currently standing at 97%, up from 96.4% in Q1 2023. This high demand matches strong retail figures recorded in the Heart of London in Q4 of 2023.

Consumer behaviour continues to evolve and, while footfall was down on the previous year, spending and transactions surged by 10% and 13% respectively year on year. These increases reflect the resilience and adaptability of businesses in the West End as they navigate changing market dynamics and consumer preferences.

Hotel occupancy rates have continued to see robust growth, reaching 79.4%, the highest since before the pandemic. This remarkable increase, up from 71% at the end of 2022, signifies a strong recovery in the hospitality sector and reflects renewed confidence in travel and a focus on sustainable tourism.

One key trend of note includes sustainable accommodation and experiences. Led by the younger generation, 80% of travellers now say travelling more sustainably is important to them. The European sustainable tourism market was dominated by the UK, capturing a 20.1% share of the market value in 2022, according to Global Data.

The HOL area has also seen a productive period for leasing deals, with 10 deals taking place between December 2023 and February 2024, totalling 52,454 sq. ft. of office space transacted in the area. Notably, Landsec’s Lucent scheme consolidates 13 unique buildings into a mixed-use development, offering 111,000 sq. ft. of prime Grade A office space and 30,000 sq. ft. of retail and leisure space, including London’s hottest new pub, The Devonshire. This demonstrates the Heart of London’s commitment to providing best-in-class office space and enhancing the overall experience for occupants and visitors.

Our Chief Executive, Ros Morgan said: “Our latest Real Estate Insights Report, indicates that the West End remains in high demand as a world-class destination to work, live, visit and invest. The report tracks economic and real estate performance as well as current and future trends. This unique, dedicated, and invaluable combination allows us to capitalise on opportunities and confidently drive the area to reach its full potential now and into future.  

It is encouraging to see our retail figures and hotel occupancy rates at near pre-pandemic levels, underscoring the Heart of London’s robust recovery across multiple sectors, and positioning it as a premier destination for leisure and tourism.”  

Here are some key statistics from the report: 

• Retail space occupancy in the Heart of London (HOL) area currently stands at 97%, up from 96.4% in Q1 2023
• The availability rate of office space in the HOL area is currently 96.1%, the highest since CoStar records began in 2005 and up from 93.7% in Q1 2023
• Retail spending, and transactions in Q4 2023 grew by 10% and 13%, respectively, compared to the previous year
• Hotel occupancy rates in HOL have reached 79.4%, the highest since before the pandemic, up from 71.0% at the end of 2022
• Between December 2023 and February 2024, there were 10 leasing deals totalling 52,454 sq. ft of office space transacted in the HOL area.

Download the report

Feedback and insights from our members and stakeholders is invaluable as we continue to shape these reports. If you have any questions or comments about the report, please email angela@holba.london.