Oxford Street is effectively “full up” for the first time since the pandemic with the vacancy rate falling to little more than 1%.
The recovery of the West End’s premier retail destination has been one of the great success stories for London since it was transformed into a ghost town by the covid lockdowns starting five years ago.
But latest retail leasing figures from property advisers Savills shows that bounce back is now complete with the vacancy rate dropping to just 1.35% at the end of last year,.
That is the lowest rate since the first quarter of 2019, a year before most of the retail sector was shut down by Boris Johnson’s Government to stop the spread of the virus.
The slow return of commuters and tourists after the lockdowns were lifted in 2021 and 2022 left Oxford Street ravaged with many vacant units, often filled by so called American candy stores selling sweets, chocolate and vapes.
One of the biggest departures was Debenhams which announced in January 2021 that its department store would not reopen after the pandemic.
But Savills said last year represented a record for Oxford Street for occupational activity with the vacancy rate dropping 2.29 percentage points year on year and 1.35% quarter on quarter.
The recovery has been strongest west of Oxford Circus where vacancy levels are at just 0.8%. The eastern half of Oxford Street has a slightly higher vacancy rate of 2.1%.
Savills says the supply shortage is expected to continue this year with 12 new brands due to open in 2025 including Holland & Barrett, Abercrombie, and Mango.
This has the potential to reduce the entire street’s vacancy rate to below 1%, Savills said.
As a result rents are forecast to rise further despite strong growth over recent months. Prime rents were up by 25% year on year Oxford Street West and by 33.3% for Oxford Street East in the fourth quarter.
Bond Street has also seen a strong performance in lettings, including flagship openings for Maison Diptyque, Jacquemus, Roberto Cavalli, and Moncler, resulting in a vacancy reduction from 6.3% to 2.8% in the year December.
Richard Scott, director in central London retail at Savills, said: “ “Oxford Street is undergoing a phenomenal evolution, driven by reduced business rates, recovering domestic and tourist spending, and significant investment, all of which have strengthened its position on the world stage.
“Retailers are also making substantial investments in their stores, with a clear focus on creating immersive, experiential environments for customers.”
Marie Hickey, Director of Research at Savills, said: “While there are a number of headwinds to occupier confidence to watch for, such as the increase in NI contributions in April and Business Rates revaluation in April 2026, for the best quality space in the best location, brands and retailers are taking a longer term, more strategic view.”
