Where are Central London retail rental prices headed in 2025 (August update)

Central London’s retail market is showing a modest post-pandemic rebound. The growth is driven by luxury demand, constrained supply, and improved consumer sentiment. Taken together, these trends are more likely to shape retail lease rates as we head to Q4 2025. Therefore, if you are an investor or space-seeker, here is what you should expect in retail rental prices in Central London.

The commercial real estate London market is returning to a more normal retail cycle. International footfall is back, office occupancy has improved, and landlords are tightening supply on premium streets. Also, vacancy rate in prime retail markets has dropped to 1.5% in Q1 2025, marking its lowest since 2019.

Below is a summary of the average annual retail rent per sq ft in Central London:

• Prime West End (Bond Street – trophy street): £1,200 per sq ft
• Oxford Street (best frontage): £675 per sq ft
• Prime high street (England & Wales average): £450 per sq ft
• Broader London average (secondary mix): £55-£86 per sq ft

How occupiers are doing (and what that means for you):

The acute scarcity in supply and increased demand for quality space have intensified competition among brands. Therefore, occupiers are responding to the shift through following points:

Location remains a key factor influencing retail rental prices in Central London. Prime high street rents are relatively higher than those in more neighbourhood-focused submarkets. Below is a detailed ranking of rental prices in various markets:

Other famous streets where you can be interested in:

Oxford Street (mass market/flagship):

• Retail rental price: £675 per sq ft
• Rent driver: High retail footfall
• Best suited for: Global brands and large anchors like IKEA

Bond Street/Mayfair (highest):

• Retail rental price: £1,200 – 1,250 per sq ft
• Rent driver: West End retail pinnacle with a year-on-year growth of 20% in 2024.
• Best suited for: Ultra-luxury fashion, jewellery, and heritage brands, backed by strong CRE investment appetite

For general commercial rental prices outside trophy pitches, expect £60–£90 psf. However, precise rates may vary depending on micro-location, frontage, and sector demand.

Understanding how retail rental prices vary per square foot (psf) is crucial for space seekers. The following is the cost-per-unit-size FY-25 retail outlook.

1) Unit size: 1,001 – 1,300 sq ft.

• Typically for: A small shop rent or ground floor retail unit aimed at boutiques, independent fashion, or niche F&B.
• Average rental price: £52 psf.

2) Unit size: 1,301 – 1,500 sq ft

• Typically for: Slightly larger boutiques, small cafes, or specialist retail requiring additional space.
• Average rental price: £85-90 psf.

3) Unit Size: 1,501 – 2,000 sq ft

• Typically for: Medium-sized or combined retail units.
• Average rental price: £50–90 psf

4) Unit Size: 2,001 – 2,500 sq ft

• Typically for: Larger round floor and basement retail or multi-use spaces.
• Average rental price: £45–50 psf.

5) Above 2,500 sq ft

• Typically for: Larger retail unit flagships, department-style stores, and brand experience spaces.
• Average rental price: £45–50 psf.

⍟ What this means for tenant planning:

The unit sizes must be taken in mind when you’re going for retail store planning (1). Smaller high-visibility units often command the highest per-square-foot rents due to prime locations and heavy foot traffic. Being in the heart of Central London, you gain the higher chance of attract car-free pedestrians to drop you a visit (2).

Meanwhile, larger spaces benefit from lower psf rates, but total rent is still higher. This makes them suitable for brands needing more display or stock space.

Central London 2025 retail market is likely to experience a wider gap between high-performing trophy streets and weaker secondary markets. Below are the main trends investors and tenants should watch for:

Vacancy rates are falling – but expect polarised demand

Areas like Oxford Street retail rents are benefiting from a sharp drop in vacancy, currently at 2.2% from 10% during the pandemic. City fringe and other high-traffic corridors are seeing similar gains. However, secondary streets remain challenged due to uneven footfall and shifting dynamics.

Leasing activity is picking up, supported by retailer expansion

Q4 2024 leasing reached a two-year high, with volumes up 15% year-on-year. This is due to returning tourism and higher office occupancy. CBRE forecasts 1.9% annual rental growth for high street and shopping centre sectors in 2025, potentially hitting 2.6% under strong consumer spending. Major openings, such as IKEA on Oxford Street, are drawing sustained attention to ground floor retail and large unit opportunities.

Investment appeal is rebounding in prime locations

Grosvenor, in West End retail, reported a 16.5% profit rise and 97% occupancy, highlighting the fundamental role of the post-pandemic rebound. Elite districts like Mayfair and Belgravia remain magnets for investors, with low vacancy and solid tenant demand supporting capital values.

If you’re shopping for a ground-floor or corner shop retail unit in Central London, The Langham Estate has a solution for you. We currently have different retail space formats, from blank canvas to fully fitted and serviced. Our offerings include:

⍟ Whole building to let:

• 1 Great Titchfield St

⍟ Ground floor and basement to let:

• Windsor House – 40-41 Gt Castle Street
• 146 – 148 Oxford Street
• 51 – 53 Eastcastle Street

Why should you choose us:

We are the best property management company in Fitzrovia with sustainability-aligned spaces and estate-level ESG stewardship. Our location in the vibrant Fitzrovia Quarter also means you have easy access to leisure, wellness, dining, and shopping amenities.

Reference list:

(1) Why does retail store space planning matter for business success?

(2) The 15 minute office: How Fitzrovia lets tenants go car-free?