A record number of London offices are being rented out at more than £100 per sq ft, as the “super prime” sector becomes an ever-increasing part of London’s commercial property market.
According to real estate advisor CBRE, 37 properties were rented out at £100 or more per sq ft during the first quarter of 2023: the highest total on record. Those deals make up 14% of total office rentals during the quarter.
“What is clear is that Q1 2023 was not an outlier,” says Simon Brown, senior director and head of office research at CBRE. “The trend towards high rent deals has been evident since the end of lockdown and for the first time, £100+ per sq ft rents are becoming more common place outside of the West End.
“Whilst leasing activity in general has slowed since the pandemic, we have seen an uptick in activity for the very best quality space.”
Adam Cosgrove, head of West End leasing at CBRE, added that these deals have usually been driven by tenants looking for more sustainable offices in central London locations.
“We have seen super-prime transactions across all West End submarkets, but it has been particularly pronounced within Mayfair & St James’s where rents have been secured significantly ahead of the prevailing ‘headline prime rent’,” he said. “The super-prime transactions have been driven by demand from occupiers looking to secure the very best space with strong sustainability credentials.
“We are also seeing a far greater spread of rents being secured within buildings with the highest rents being achieved on the stand-out floors, often benefitting from access to private terraces and high-quality amenity space.”
