Research
Central London Office Market Update Guide To Rents and Rent Free Periods October 2013
The London office market in numbers... Prime West End rents have risen by up to 10% since Q3 2012 and are now £97.50 - £120 per sq ft per annum Prime City rents are £52.50 - £59.50 per sq ft & £65-£70 per sq ft per annum for the upper floors of tower buildings Typical rent discounts in the City are between 5-10% compared to 3-5% in the West End Prime West End rents are now an unprecedented 85-102% higher than City equivalents
Central London office rents are predicted to rise by 5-10% by mid 2015
Rent free periods for 5 year leases up to 12 months (City) and up to 9 months (West End) carterjonas.co.uk/officesearch
Image courtesy of Canary Wharf Group plc
Rents for prime located Grade A office space in all the Central London sub-markets, save for Docklands, have risen since the beginning of the year due, primarily, to the limited supply of vacant floor space, rather than resurgent tenant demand.
C e ntral London Office Locations
N1 NW1 WC1
EC1 EC2
W1 W11
WC2
W2 W8
W6
W14
EC4
E1 EC3
E14
SE1 SW7
SW1 SW3
West End Paddington/Kensington/Chelsea Victoria/Westminster Mayfair/St James’s Soho/North of Oxford Street Euston/King’s Cross (West)
Midtown Strand/Covent Garden Bloomsbury Holborn/Fleet Street King’s Cross (East)
City/City Fringe City Core City Fringe
South Bank London Bridge/ Southwark/Waterloo
Docklands Canary Wharf Rest of Docklands
West London
Grades of office accommodation For marketing purposes office accommodation is generally categorised into grades, which are defined as follows:Grade A - new or newly refurbished office space where the building specification includes suspended ceilings and fully accessible raised floors for data/telecoms cable management, passenger lift and air conditioning facilities. Grade B - office space that may only incorporate under floor or perimeter trunking for data/telecoms cable management, rather than fully accessible raised floors, and/or air cooling facilities, instead of an air conditioning system that dehumidifies, filters and draws fresh air into the building. Grade B space also tends to be of a generally lower quality building specification. “Comprehensively refurbished” office accommodation is defined as office space that is ‘as new’, having been completely refitted throughout, to include new fixtures and fittings to the common parts and reception area, new building services – including air conditioning and passenger lift facilities, electrical, plumbing and lighting systems, and new raised floors, suspended ceilings and sanitary ware. The refurbishment specification will comply with the latest health and safety legislation and may also include re-cladding the exterior of the building. “Refurbished” space is defined as office accommodation, where the landlord has redecorated and recarpeted the available office space (but not necessarily the common parts) and overhauled, but not renewed, the building services, such as the air conditioning and passenger lift facilities.
Hammersmith/Olympia/ West Kensington Rents in the table opposite exclude rents for the upper floors of tower buildings, including The Shard, which are typically 15-25% higher than for mid-rise office buildings
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Office Rents The table below provides a geographical analysis of typical office rents in each of the Central London sub-markets as at October 2013. The variation in rents is reflective of: • • •
The different supply and demand dynamics of each sub-market The age, quality and specification of the available office space Proximity to public transport
Table 1 - Typical Quoting Rents (per sq ft pa) - October 2013 Location
Grade A
Grade B
New/Comprehensively Refurbished
Refurbished
Refurbished
Mayfair/St James’s (Prime locations e.g. Berkeley Square, St James’s Square)
£97.50 - £120.00
£82.50 - £92.50
£57.50 - £69.50
Mayfair/St James’s (Secondary locations e.g. Albermarle Street, St James’s Street)
£75.00 - £95.00
£57.50 - £72.50
£45.00 - £55.00
Marylebone (Prime locations e.g. Portman Square, Cavendish Square)
£80.00 - £92.50
£57.50 - £75.00
£42.50 - £52.50
Marylebone (Secondary locations e.g. Baker Street, George Street)
£52.50 - £69.50
£45.00 - £55.50
£37.50 - £43.50
“Fitzrovia”/Great Portland Street & Area
£65.00 - £72.50
£55.00 - £62.50
£37.00 - £42.50
Soho
£67.50 - £85.00
£47.50 - £65.00
£39.50 - £47.50
Haymarket
£47.50 - £67.50
£40.00 - £49.50
£30.00- £37.50
Victoria (Prime locations e.g. Cardinal Place, Victoria Street)
£57.50 - £69.50
£45.00 - £55.00
£32.50 - £40.00
Victoria (Secondary locations)/Westminster/Millbank
£47.50 – £55.00
£40.00 – £47.50
£30.00 – £37.50
Knightsbridge
£60.00 - £65.00
£55.00 - £62.50
£40.00 - £47.50
Paddington/Bayswater
£52.50 - £57.50
£42.50 - £50.00
£28.00 - £37.50
Euston
£55.00 - £59.50
£37.50 - £49.50
£32.50 - £37.50
Bloomsbury
£47.50 - £62.50
£38.50 - £45.00
£29.50 - £37.50
Holborn (Prime e.g. New Street Square, Fetter Lane)
£52.50 - £65.00
£38.50 - £49.50
£32.50 - £37.50
Holborn (Secondary e.g. Gray’s Inn Road, Theobalds Road)
£57.50 - £69.50
£34.00 - £42.50
£27.50 - £32.50
Covent Garden/Strand/Charing Cross
£57.00 - £69.50
£45.00 - £55.00
£37.50 - £47.50
Shaftesbury Avenue/St Martin’s Lane
£55.00 - £65.00
£40.00 - £50.00
£32.50 - £37.50
Kingsway/Aldwych/Fleet Street
£55.00 - £67.50
£38.50 - £50.00
£27.50 - £35.00
Kings Cross/St Pancras
£52.50 - £60.00
£37.50 - £45.00
£27.50 - £35.00
City of London (Prime locations e.g. Gracechurch Street, Lime Street/Fenchurch Street, Old Broad Street)
£52.50 - £59.50
£45.00 - £52.50
£35.00 - £42.50
City of London (Secondary locations - e.g. Blackfriars, Old Bailey, Barbican, Liverpool Street, Aldgate)
£45.00 - £52.50
£35.00 - £42.50
£26.50 - £35.00
City Fringe North / North West– Farringdon, Clerkenwell, EC1 & Shoreditch, EC2
£45.00 – £55.50
£32.50 – £42.50
£22.50 - £30.00
City Fringe East - Spitalfields, Aldgate East, E1 & Tower Hill, EC3
£28.50 - £39.50
£22.50 - £27.50
£18.00 - £22.50
Southwark/London Bridge (Prime locations – river views)
£45.00 - £52.50
£37.50 - £42.50
£32.50 - £37.50
Waterloo/Southwark/London Bridge (Secondary locations – no river views)
£42.50 - £50.00
£32.50 - £39.50
£22.50 - £30.00
-
£30.00 - £35.00
£22.50 - £29.50
£40.00 - £45.00
£32.00 - £39.50
£22.50 - £30.00
-
£22.50 - £29.50
£13.00 - £20.00
West End - W1, W2 & SW1
‘Midtown’ - WC1, WC2, NW1, Pt EC1 & Pt EC4
City of London - Pt EC2, EC3 & EC4
“Fringe” City of London - EC1, Pt EC2, Pt EC3 & E1
“South Bank” - SE1
Albert Embankment (with river views) Docklands - E14 Docklands (Prime locations e.g. Canary Wharf/Heron Quays) Docklands (Secondary locations e.g. Limeharbour, Marsh Wall ) South West/West London
-
£40.00 - £45.00
£27.50 - £37.50
Kensington/Queensway/Notting Hill
£47.50 - £55.00
£35.00 - £45.00
£26.50 - £32.50
Fulham/Hammersmith/West Kensington/Olympia
£40.00 - £47.00
£32.50 - £39.50
£22.50 - £29.50
Chiswick
£39.50 - £46.50
£28.00 - £35.00
£22.50 - £27.00
Chelsea
Source: Carter Jonas Research
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Rent discount s The extent to which discounts can be negotiated on landlord’s quoting rents, tends to vary with location and how long a particular property has been on the market. Discounts of 5 – 10% are not uncommon on some City office buildings that have been on the market for over 12 months. Contrast with quoting rents on prime located Mayfair and South Bank office space where supply side constraints are more intense and where rent discounts of 3 – 5 % are more typical.
Rent free p eriods Landlords have been responding to the decline in office vacancy levels and the gradual, but sustained, improvement in demand for Central London office space, which began during Q4 2009, by increasing quoting rents and reducing the level of rent free period incentives that they are prepared to offer to new tenants. Table 2 below provides a summary of the rent free periods that are typically available today.
Table 2 - Rent Free Periods By Sub-Market – October 2013 Location
Typical Rent Free Period Agreed (Months) 5-year lease
10-year lease
City of London Prime (Old Broad Street, EC2 / insurance district, EC3)
10 - 12
22 - 25
City of London Secondary (Blackfriars, EC4, Barbican, EC2, Liverpool Street, EC2, Aldgate, EC3)
11 - 13
24 - 26
City “Fringe” North - (Farringdon, EC1, Shoreditch, EC2)
6-9
15 - 20
City “Fringe” East - (Spitalfields, Aldgate East, E1 & Tower Hill, EC3)
11 - 13
22 - 26
“Midtown” (Holborn, WC1 / Covent Garden, WC2)
7 - 11
16 - 22
West End Prime (Mayfair, W1 / St James’s, SW1)
6 - 10
14 - 20
West End Secondary (Marylebone, W1 / Victoria, SW1)
9 - 11
20 - 24
“South Bank” (London Bridge / Waterloo, SE1)
7 - 10
16 - 22
West London (Hammersmith, W6, Olympia, W14 and surrounding area)
9 - 12
18 - 24
Compa r i so n O f Tota l O f f ic e Co st s – 20 0 9 Vs 2 0 1 3 Rent, business rates and building service charge costs are the principal outgoings associated with leasing office space in a multi-tenanted building. Table 3 below provides a summary, by sub-market, of the changes in office costs since mid 2009, which has been chosen as the base year from which to compare the increases in office costs, because: •
Mid 2009 is the generally accepted low point in the office market cycle, following the international credit crisis.
•
It is the year that immediately preceeded the UK wide business rates re-valuation of commercial property which took effect from 1 April 2010. The re-valuation has resulted in significant above inflation increases in business rates payable in many Central London locations - most notably in the West End in areas such as Mayfair, St James’s, Marylebone / North Oxford Street, Soho and Victoria.
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Table 3 - Typical Office Costs - Prime Located New & Refurbished Grade A Space - 2009 vs 2013 (£ per sq ft pa) Cost Variable
Rent
Business Rates
Service Charge
Total
West End
City of London
Docklands
Midtown
South Bank
2009
2013
2009
2013
2009
2013
2009
2013
2009
2013
60.00
97.50
45.00
52.50
32.50
35.00
45.00
60.00
32.50
45.00
~
~
~
~
~
~
~
~
~
~
85.00
110.00
50.00
57.50
40.00
42.50
52.50
67.50
42.50
52.50
18.00
40.00
15.00
17.50
12.50
14.75
12.75
21.00
11.00
16.00
~
~
~
~
~
~
~
~
~
~
22.50
50.00
17.75
22.50
14.50
16.00
15.25
25.00
14.25
17.75
7.00
9.00
7.00
9.00
9.00
11.84
7.00
9.00
7.00
9.00
~
~
~
~
~
~
~
~
~
~
10.50
12.50
10.50
12.50
12.50
15.34
10.50
12.50
10.50
12.50
85.00
146.50
67.00
79.00
54.00
61.59
64.75
90.00
50.50
70.00
~
~
~
~
~
~
~
~
~
~
172.50
78.25
92.50
67.00
73.84
78.25
105.00
67.25
118.00
% Increase
46.19 % -
17.91% -
10.21% -
34.19% -
72.35%
18.21%
14.06%
39.00%
82.75 23.05% 38.61%
Source: Carter Jonas Research
Notes: 1) The rents in the table relate to Grade A office space, i.e, new or comprehensively refurbished accomodation incorporating air conditioning and fully accessible raised floors for data / telecoms cable management. 2) The rents exclude rents for the upper floors of tower buildings which typically command rental premiums of 15 - 25 %. 3) Geographical definitions - the prime office locations for each Central London office sub-market set out in the table above comprise the following: City of London =
Bank, EC2 & the insurance district, EC3
Docklands =
Canary Wharf, E14
Midtown =
Covent Garden, Strand and Kingsway, WC2
South Bank =
London Bridge, SE1
4) Docklands service charge costs include the Canary Wharf estate charge, currently £2.84 per sq ft pa. 5) Business rates are based on the rental value of a property - business rates will therefore be higher in areas associated with high rents
Office Mark e t Overvi ew •
West End versus City office costs - prime West End office rent, business rates and service charge costs are currently circa
£67.50 to £80.00 per sq ft pa higher when compared with City office overheads, representing a 85.44 to 86.49% difference. •
The West End has seen combined rent, business rates and service charge costs increase by between 46% and 72% from
£85-£118 per sq ft to £146.50-£172.50 per sq ft per annum since mid 2009. •
The City’s combined costs increased by 18% from £67-£78.25 per sq ft to £79-£92.50 per sq ft per annum during the same period.
•
Canary Wharf has recorded lower rates of increase in office costs, reflecting the fact that it is the only sub-market that currently has an oversupply of vacant office space due to the significant ‘downsizing’ in headcount in the banking and legal sectors. Combined costs increased by between 10% and 14% from £54-£67 per sq ft to £61.59-£73.84 per sq ft per annum.
•
In Midtown combined costs have risen by between 34% and 39% from £64.75-£78.25 per sq ft in 2009 to £90-£105 per sq ft per annum today.
•
In South Bank, combined costs have increased by between 23% and 38% from £50.50-£67.25 per sq ft in 2009 to £70-£82.75 per sq ft per annum.
•
Demand for office space across all the Central London office sub-markets, although fragile, has continued to improve since the beginning of the year in response to sustained growth in the world and UK economies.
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•
‘Lease events’, such as break options and lease expiries, are encouraging tenants to consider their property options, including lease re-negotiation/renewal or relocation to smaller/larger/better quality premises.
•
The most active sectors of demand comprise: -
Insurance and international law firms - City core
- Telecoms, media and technology (TMT) - north City fringe, Midtown, West End and South Bank office markets •
Demand for office space from the banking sector, traditionally the mainstay of the City office market, remains subdued due to ongoing restructuring of the banking sector, following the credit crisis and the introduction of new regulations, including the Basel III regulatory framework relating to capital adequacy ratios.
•
All the Central London office sub-markets, except for Docklands, are currently experiencing historically low vacancy levels - a consequence of the limited availability of development finance with which to fund speculative office development.
•
It is the landed estates such as the Grosvenor, Howard De Walden and Crown Estates, and the quoted property companies such as Land Securities, Great Portland Estates and British Land that are currently the pioneers of post banking crisis speculative office development in Central London - significantly, these organisations are not reliant on debt finance to fund their development activities.
•
Supply bottle neck - the current wave of speculative office developments and refurbishments is unlikely to be sufficient to meet demand assuming that it returns to it’s long term average. The under-supply of Grade A office space is likely to persist throughout many parts of the Central London office market for the foreseeable future until there is a significant improvement in the availability and cost of development finance.
M a r ke t Trends •
The significant increase in rents and business rates costs since Q2 2010 in locations such as Mayfair, St James’s, Marylebone and Soho is likely to result in the continued migration of tenants in cost sensitive business sectors, such as the recruitment, media and business services sectors, to lower cost areas such as Holborn, Farringdon, Clerkenwell, Shoreditch and secondary City locations such as Blackfriars, St Paul’s, Liverpool Street, Finsbury Square and Tower Hill and Hammersmith and Paddington, to the west.
•
Floor space staffing densities - some business sectors are taking advantage of lease events such as break options and lease expiries to facilitate a move to fewer floors in the same building or a relocation to smaller office accommodation. Law firms, in particular, are moving away from the traditional model of a ‘cellular’/partiotioned operating layout and are opting for open plan working environments which afford greater opportunities to accommodate the same number of staff on less floor space. This emerging trend is being driven by the squeeze on businesses’ profit margins and, in particular by the significantly above inflation increases in property related costs such as rent, business rates and utilities/energy costs.
•
New building design - developers, anxious to accommodate the changing operational requirements of modern businesses, are designing office buildings to accommodate a higher staffing density in terms of power supply, air conditioning capacity and fire escape access. Traditionally, buildings have been developed to accommodate a staffing density of 1 person to 10 sq m of floor space, however, buildings designed to accommodate a staffing to floor space ratio of 1:8 sq m are now becoming more common
•
A business’ property overheads are often the second largest outgoing after staff costs. The trend towards occupying less floor space, following a lease expiry or exercise of a break option, is likely to continue due to advances in mobile data / telecoms technology and changes in working practices such as hot-desking. Home working policies and reduced desk sizes are also being adopted by tenants in order to enable lower levels of floor space to be occupied.
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•
The ‘Google’ effect - Google’s decision to develop it’s 750,000 sq ft European headquarters in London, at the King’s Cross Central scheme, and the company’s policy of ‘incubating’ start-up technology companies has established London as the European capital of the TMT business sector which has manifested itself through increased demand for office space, over the last few years, in the north City fringe area - Farringdon, Clerkenwell, and Shoreditch.
•
In the medium term, and notwithstanding a current and weak tenant demand, we believe that prime office rents for well located refurbished and new Grade A space in Central London will rise by an average of 5 - 10% by mid 2015 due to ongoing supply – side constraints, which are unlikely to improve appreciably in the next few years, due to the lag between starting and completing large scale office developments. Rental growth is likely to be more pronounced in locations such as Mayfair, St James’s, Marylebone, Soho and South Bank areas where office vacancy levels are particularly low.
T he City of London Offic e Marke t •
The insurance sector - throughout 2012 the insurance sector was the main driver of demand for City office space. Two of the City’s largest speculative office developments - the Leadenhall Building (Cheese Grater – 610,000sq ft) and 20 Fenchurch Street (Walkie Talkie – 690,000 sq ft) are already over 50% pre-let to insurance companies, notwithstanding that both buildings are not scheduled for completion until Q2 2014.
•
Rents for the upper floors of City core tower buildings are typically £65-£70 per sq ft per annum
•
Demand – during 2013, by contrast ,international law firms have,been the predominant ‘players’ in the City office market, while demand from the banking sector which continues to be subdued.
•
Notable lettings - several large scale lettings, over 100,000 sq ft, have taken place since the beginning of the year, including: -
213,000 sq ft at Sixty
-
141,000 sq ft at 12-14 New Fetter Lane, EC4 to Bird and Bird (legal).
-
140,000 sq ft at Cannon Place, EC4 to Cameron McKenna (legal).
London, Holborn Viaduct, EC1 to Amazon (media).
•
Development activity – floor space vacancy levels in the City are falling which is causing modest rent increases in parts of the City core which, in turn, is encouraging some developers that are not reliant on debt finance to implement their development programmes. One Angel Court, EC2 is one of the more high profile redevelopments that is proceeding - the landmark tower building is to be extended, refitted and reclad and will offer over 300,000 sq ft when completed in Q3 2016.
•
City jobs – job vacancies rose appreciably in August, traditionally a quiet period for the recruitment sector, according to a recent survey carried out by international recruitment specialist, Astbury Marsden. If a sustainable trend in the hiring of new staff continues, this is likely to translate in to increased demand for City office space.
•
Financial regulation - uncertainty in the City jobs market has been lifted following the European Council’s lawyer’s advice that imposing the financial transaction tax on countries that have not signed up to the scheme would be in breach of European Union rules.
Doc k lands O ffic e Mar ket •
Notable lettings - business services consultant, KPMG, has taken a lease on 200,000 sq ft at 30 North Colonade at Canary Wharf, which adjoins KPMG’s 15 Canada Square headquarters.
•
Vacancy levels - the Docklands office market is the only sub-market that currently suffers from an over-supply of vacant floor space - a consequence of ‘downsizing’ in the banking sector.
•
Office overheads - as Table 3 above illustrates, the Docklands office market has enjoyed the lowest growth in property overheads, ie rent, business rates and service charge costs since mid 2009. A combination of lower property costs and high quality buildings that can accommodate medium to large scale office requirements on one floor, at a fraction of the cost when compared to locations in, for example, the West End, are enticing tenants from business sectors, other than banking, finance and law, to the Docklands area, including, for example, technology, media and telecoms companies.
Midtow n Offic e Market •
The Midtown office market has witnessed the largest Central London office occupier transaction since the beginning of this century - Google’s purchase of land and the construction of it’s new European headquarters, comprising over 750,000 sq ft, at King’s Cross Central.
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•
Pre-letting activity - Derwent London has pre-let the entire 101,500 sq ft at it’s 40 Chancery Lane, WC2 development to Publicis Group, for the company’s Saatchi and Saatchi subsidiary. This letting demonstrates the acute shortage of readily available office space in the Midtown market capable of accommodating large scale office requirements, as well as the changing character of the Midtown office market. Traditionally, Holborn has been associated with the legal profession but is now well established as a TMT sector location following lettings to Skype (89,000 sq ft) and Weber Shandwick (64,000 sq ft) at 2 Waterhouse Square, Holborn, EC1.
•
Other notable lettings in Midtown include: - 31,000 sq ft at Legal & General’s 6 Agar Street, on the edge of Covent Garden, WC2, to law firm Davenport Lyons, which has relocated from Mayfair. -
138,000 sq ft at 12-14 New Fetter Lane, EC4 to law firm, Bird and Bird.
West E nd O f f ic e M a r ke t •
Record rents have been achieved, post 2008/09 banking crisis, in the West End’s prime office locations - Mayfair and St James’s. The highest recorded rent, to-date, is £120 per sq ft per annum, achieved on 8,246 sq ft at Devonshire House, 1 Mayfair Place, W1 to energy company, Noble.
•
Pre-letting activity - because of the acute shortage of new and refurbished Grade A office space capable of accommodating office requirements in excess of 10,000 sq ft on one floor, a number of buildings that are being developed on a speculative basis, without a tenant being in place, have become fully let prior to completion of construction. Examples include: -
9 5 Wigmore Street - a 112,000 sq ft development by Great Portland Estates, much of which was let before completion to tenants including Bridgepoint Advisors (private equity) and Lane Clark and Peacock (financial services).
-
6 2 Buckingham Gate, SW1 - developer, Land Securities, has secured several pre-lets at the recently completed 257,000 sq ft building including, for example, 24,000 sq ft to World Fuel Services (fuel supply specialists) and 37,000 sq ft to Rolls Royce (engineering).
•
The Victoria office market - Land Securities, a major property owner in Victoria, has implemented a 3-4 year development programme in the area. Recognising the acute shortage of buildings that can accommodate large-scale office requirements on one floor in the West End, the company is developing a series of buildings along Victoria Street, including the ‘Zig Zag’ building (188,000 sq ft, completion due Q1,2015) and the ‘Nova’ development located opposite Victoria Station, which incorporates 603,000 sq ft of offices, and is to be constructed in two phases with completion of the first phase scheduled for Q2, 2016
•
There are significantly greater supply side constraints in the West End compared with the other Central London office sub-markets due to restrictive town planning policies that are biased towards preserving the historic street scapes of areas such as Mayfair and St James’s - which limits the scope for the development of new, larger scale, office buildings- and the increasing trend towards the conversion/ redevelopment of existing office buildings to higher value residential use. This trend has been reinforced by planning policies which promote the use of office buildings to residential use, particularly in the case of historic buildings which may have
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South Bank Of f ic e Mar ket •
The Shard - has dominated media coverage of the South Bank office market, notwithstanding that lettings at the building have been slow since it’s completion in the summer last year. Recent lettings at the building include 28,000 sq ft to Al Jazeera (media) and 18,000 sq ft to Duff and Phelps (financial services) and it is understood that at least three other lettings at the building are due to complete imminently.
•
Shard rents - the lettings that have completed, and deals that are shortly to complete, at The Shard are understood to be at rental levels between £62.50 and £70 per sq ft per annum which are at rental levels more reflective of the “penthouse” floors of City tower buildings - contrast with the lettings of Grade A office space elsewhere in the South Bank area where rents are typically between £47.50 and £52.50 per sq ft per annum. The ‘premium’ rentals being achieved at The Shard reflect the uniqueness and iconic status of the building.
•
Other notable lettings - in recent months a number of sizeable lettings at the South Bank have been announced including: -
4 28,000 sq ft at The Place, London Bridge Street, SE1 - the entire building has been recently let to News International (media) which is relocating from it’s headquarters at Thomas More Square, E1.
•
226,000 sq ft at Sea Containers House, 20 Upper Ground, SE1 to Ogilvy and Mather (media).
Supply side constraints - the South Bank office market continues to suffer from an under-supply of vacant floor space and this trend is likely to persist for the following reasons: -
Town planning policy - the two local authorities that between them have jurisdiction over the South Bank area - the London Boroughs of Lambeth and Southwark - have tended to favour planning policies that encourage the redevelopment of former office buildings/sites for hotel and residential uses. The Kings Reach office complex at Stamford Street in Southwark is one such example - the property is to be redeveloped for a mixed use scheme which will be predominantly residential in nature.
-
Conservation policy - following lobbying by English Heritage and UNESCO, the proposed redevelopment of Elizabeth House and, separately, the Shell Centre, both located off York Road at Waterloo, are on hold pending, respectively, judicial review and call in by the Secretary of State. As a consequence, both developments, which would have provided over 1,000,000 sq ft of much needed office space on the South Bank, are now on hold for the foreseeable future.
T he West London Of f ic e Mar ket •
Hammersmith – established west London office locations such as Hammersmith have benefitted from the trend for some West End office occupiers to migrate west to Grade A office buildings where rents and business rates costs are significantly lower than those in areas such as Mayfair and St James’s.
•
Rents - A rent of £47 per sq ft per annum is understood to have been agreed on a recent letting of 40,000 sq ft to Pernod Ricard at Development Securities’ recently completed 10 Hammersmith Grove, W6, the first phase of which comprises 110,000 sq ft. This is a record rent achieved in Hammersmith - rents for refurbished, well located, Grade A office space are typically, currently, £38.50-£41.50 per sq ft per annum.
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Letting Activity - Hammersmith has also witnessed one of the largest office lettings in West London in recent years, the leasing of 115,000 at 184 Shepherds Bush Road, W6 to customer research company, Dunnhumby which is understood to have agreed a rent of £39.50 per sq ft per annum for the refurbished office space.
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The Tenant Representation Team All advice provided by the Tenant Representation team is completely impartial and free of landlords’ needs. The team provides property consultancy services solely to occupiers. Our tenant representation services include:
Commercial Centres
Office search and relocation management services
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Building, air conditioning and passenger lift surveys
Lease and rent review negotiation
Business rates analysis and appeal
Relocation budgeting and planning
Service charge audit
Repairs/dilapidations assessment and negotiation
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LEEDS
For more information on the Central London office market, office availability, rents and rent free periods and budgeting and planning for a lease renewal, rent review or office relocation please contact:
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Catherine Penman, Head of Research 01604 608203
[email protected]
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OXFORD
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LONDON
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WINCHESTER
Michael Pain, Partner, Head of Tenant Representation 020 7016 0722
[email protected] Luke Wild, Senior Surveyor, Tenant Representation 020 7016 0725
[email protected] Tim Atherton, Senior Surveyor, Tenant Representation 020 7016 0724
[email protected] Jeremy Gidman, Partner, Head of Asset Management 020 7016 0727
[email protected]
020 7016 0720
[email protected] Berger House, 36-38 Berkeley Square, London W1J 5AE
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About Carter Jonas Carter Jonas commercial has dedicated, specialist teams in six major locations throughout England offering strategic and consultancy advice in the key commercial sectors of Landlord Services, Tenant Services, Agency, Business, Science and Industrial Developments, Valuations, Investment and Asset Management, Planning and Development. Carter Jonas is therefore well placed to offer regional and national advice on all matters relating to commercial property to both corporate and private clients. The information set out in this document is provided for guidance purposes. We recommend that the advice of an experienced, qualified, property consultant is sought prior to exchanging contracts or making any irreversible strategic lease renewal, rent review or relocation decisions. The contents of this document are protected by copyright and should not, in whole or part, be published or otherwise reproduced, without the prior written approval of Carter Jonas LLP.
