Overseas investors will continue to seek large office stock in the capital, tempted by the West End having the strongest five-year office rental growth outlook in Europe, minus the City.


As well as core West End offices, foreign demand for high-quality retail assets will remain strong, with rising interest from countries such as Japan, Jones Lang LaSalle said in a West End report.


The research, commissioned by the New West End Company and London Business Alliance, said that the West End contributes 20% to the capital's GDP, and the area is expected to reap £12.5bn in spend by 2020.


A lack of space for restaurants and shops was highlighted, meaning the core West End area will expand and create new districts to accommodate demand.


The competition for retail space has resulted in rental growth for prime retail being second only to the market in Moscow.


Guy Grainger, chief executive of JLL, said: “East Oxford Street will see significant growth over the next few years. Developers are already savvy to this and have begun multiple projects that will give the area the facelift needed in anticipation of Crossrail’s arrival but there are risks."


He added: “Single ownership can achieve great things in terms of public realm, tenant mix and place-making, as we have seen with the work of the Crown Estate and Shaftesbury. The proposed legislation on formalising the contributions of property owners to business improvement districts could provide the structure to implement the cohesive approach needed to rejuvenate areas for the best possible outcomes."