LONDON SOUTHBANK

OFFICE LETTING MARKET AUTUMN 2014

This is a summary of our findings of the current London Southbank office lettings market, as a simplistic guide for clients facing relocations of premises, rent reviews and property cost budgeting for year-end and 2015.

Trend (of supply/demand/pricing) favours landlords for several years, balancing out in 2018. Increase in rents over the last 12 months 9-11%. Rent frees 15-22 months (last 12 months) with acute imbalances in negotiations; now drying up at front-end and disappeared from break points. Local infrastructure hotspots (e.g. London Bridge – Blackfriars) will see rents spike above trend. Waterloo/ Shell Centre/ Elizabeth House redevelopment 2018 £80psf. Lack of availability, supply-side limitations, rising rent demand. Declining rent free allowances and other incentives and benefits for ingoing tenants.

September 2014 Rents; Grade A psf         £50 - £57.50 average (refurbished modern space) Grade B psf         £67.50 - £80.00 (new build/ absolute best) Grade C psf         £37.50 - £50.00 (un-refurbished/ good modern)

Rent progression? 30 September 2014 average Grade A £57.50 30 September 2015 average Grade A £62.50 30 September 2016 average Grade A £67.50

Whilst every client situation is different and our advice and services are bespoke and personalised, it is an interesting ‘big picture’ and quite a contrast with economic slump conditions 5 years ago with the recovery now very much in evidence and Central London leading the way.