Commercial property rents
in London have risen by an average of 70% in the last five years, according to
The research from EY identified
Shoreditch as the area with the fastest rising rent – with average rents per sq
ft rising 181% between 2010 and 2015.
Average rents increased from £33/
sq ft to £55/ sq ft over the five-year period, with four areas of the capital
seeing their commercial property rents at least double (Clerkenwell,
Farringdon, Shoreditch and St James’s).
St James’s was found to have the
most expensive average commercial rent for 2015 at £91/sq ft, up from £43/sq ft
in 2010. This was followed by Mayfair with £82/ sq ft and
Belgravia/Knightsbridge with £72/ sq ft.
At the other end of the scale,
Docklands was the area with the cheapest average rent at an average of £32/ sq
ft, followed by the Southbank (£39/sq ft), Aldgate (£41/ sq ft), Euston/Kings
Cross (£45/ sq ft), Clerkenwell (£45/ sq ft) and Farringdon (£47/ sq ft).
Russell Gardner, UK & Ireland
head of real estate at EY, said: “London’s property market is and has been a
special case. With a growing population, strong economic performance and a
shortage of new properties, the challenges in the capital are a result of
London’s own success.
“To see four areas of London with
over 100% increase in average rent per sq ft in only five years is testament to
this and reiterates just how popular central London is to a wide range of
industries. Businesses are happy to increase their spending on commercial
property to be alongside their competition in the same sector.”
Sector trends driving demographic shift
Several areas have received
sustained sector-targeted investment, with Southbank experiencing a 40%
increase in transactions by the energy sector since 2010, while Victoria has
seen a 29% increase in transactions by the services sector.
There has also been a rapid
increase in transactions involving serviced offices across central London, with
Paddington seeing a 32% increase since 2010 and Farringdon and Shoreditch
experiencing rises of 52% and 43% respectively.
The services sector looks to be
moving out of midtown and west London, with Covent Garden and Euston/Kings
Cross reporting decreases in transactions of 48% and 40% respectively, and
Belgravia/Knightsbridge and Marylebone experiencing transactions decreases of
34% and 31% respectively.
Farringdon has seen a near 30%
decrease of education/public sector transactions, as well as a 24% decrease by
those in the retail sector, with Belgravia/Knightsbridge potentially picking
that business up after seeing a 28% increase in retail transactions between
2010 and 2015.
If you are looking for office space in Central London please call Gryphon Property Partners on 0203 440 9800 or click on the following link - Office