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

EC1
WC1
W1 EC2 E1
W11 W2 WC2 EC4 EC3 E14

W8 SE1

W14 SW7
W6 SW1
SW3

West End
Paddington/Kensington/Chelsea Grades of office accommodation
Victoria/Westminster
For marketing purposes office accommodation is generally categorised into grades,
Mayfair/St James’s
Soho/North of Oxford Street which are defined as follows:-
Euston/King’s Cross (West) Grade A - new or newly refurbished office space where the building specification
Midtown includes suspended ceilings and fully accessible raised floors for data/telecoms cable
management, passenger lift and air conditioning facilities.
Strand/Covent Garden
Bloomsbury Grade B - office space that may only incorporate under floor or perimeter trunking for
Holborn/Fleet Street data/telecoms cable management, rather than fully accessible raised floors,
King’s Cross (East) 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
City/City Fringe generally lower quality building specification.
City Core “Comprehensively refurbished” office accommodation is defined as office space that
City Fringe 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
South Bank
conditioning and passenger lift facilities, electrical, plumbing and lighting systems, and
London Bridge/ new raised floors, suspended ceilings and sanitary ware.
Southwark/Waterloo The refurbishment specification will comply with the latest health and safety legislation
and may also include re-cladding the exterior of the building.
Docklands
“Refurbished” space is defined as office accommodation, where the landlord has
Canary Wharf
redecorated and recarpeted the available office space (but not necessarily the common
Rest of Docklands
parts) and overhauled, but not renewed, the building services, such as
West London 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
West End - W1, W2 & SW1 Refurbished Refurbished
Refurbished

Mayfair/St James’s (Prime locations e.g. Berkeley

£97.50 - £120.00 £82.50 - £92.50 £57.50 - £69.50
Square, St James’s Square)
Mayfair/St James’s (Secondary locations e.g. Albermarle
£75.00 - £95.00 £57.50 - £72.50 £45.00 - £55.00
Street, St James’s Street)
Marylebone (Prime locations e.g. Portman Square,
£80.00 - £92.50 £57.50 - £75.00 £42.50 - £52.50
Cavendish Square)
Marylebone (Secondary locations e.g. Baker Street,
£52.50 - £69.50 £45.00 - £55.50 £37.50 - £43.50
George Street)
“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
£57.50 - £69.50 £45.00 - £55.00 £32.50 - £40.00
Street)
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
‘Midtown’ - WC1, WC2, NW1, Pt EC1 & Pt EC4
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
£57.50 - £69.50 £34.00 - £42.50 £27.50 - £32.50
Road)
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 - Pt EC2, EC3 & EC4
City of London (Prime locations e.g. Gracechurch Street,
£52.50 - £59.50 £45.00 - £52.50 £35.00 - £42.50
Lime Street/Fenchurch Street, Old Broad Street)
City of London (Secondary locations - e.g. Blackfriars,
£45.00 - £52.50 £35.00 - £42.50 £26.50 - £35.00
Old Bailey, Barbican, Liverpool Street, Aldgate)
“Fringe” City of London - EC1, Pt EC2, Pt EC3 & E1
City Fringe North / North West– Farringdon, Clerkenwell,
£45.00 – £55.50 £32.50 – £42.50 £22.50 - £30.00
EC1 & Shoreditch, EC2
City Fringe East - Spitalfields, Aldgate East, E1 & Tower
£28.50 - £39.50 £22.50 - £27.50 £18.00 - £22.50
Hill, EC3
“South Bank” - SE1
Southwark/London Bridge (Prime locations – river views) £45.00 - £52.50 £37.50 - £42.50 £32.50 - £37.50
Waterloo/Southwark/London Bridge (Secondary
£42.50 - £50.00 £32.50 - £39.50 £22.50 - £30.00
locations – no river views)
Albert Embankment (with river views) - £30.00 - £35.00 £22.50 - £29.50
Docklands - E14
Docklands (Prime locations e.g. Canary Wharf/Heron
£40.00 - £45.00 £32.00 - £39.50 £22.50 - £30.00
Quays)
Docklands (Secondary locations e.g. Limeharbour, Marsh
- £22.50 - £29.50 £13.00 - £20.00
Wall )
South West/West London
Chelsea - £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

Source: Carter Jonas Research

carterjonas.co.uk/officesearch 5
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,

11 - 13 24 - 26
EC2, Aldgate, EC3)

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 West End City of London Docklands Midtown South Bank

Variable 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
Rent ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
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
Business
~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Rates
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
Service
~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Charge
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
Total ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
118.00 172.50 78.25 92.50 67.00 73.84 78.25 105.00 67.25 82.75

46.19 % - 17.91% - 10.21% - 34.19% - 23.05% -

% Increase
72.35% 18.21% 14.06% 39.00% 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.

carterjonas.co.uk/officesearch 7
 • ‘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 London, Holborn Viaduct, EC1 to Amazon (media).

- 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).

• 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.

carterjonas.co.uk/officesearch 9
• 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:

-  5 Wigmore Street - a 112,000 sq ft development by Great Portland

9
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.

• 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
Commercial Centres solely to occupiers. Our tenant representation services include:

ƒƒ Office search and relocation ƒƒ Building, air conditioning and

"
management services passenger lift surveys
ƒƒ Lease and rent review negotiation ƒƒ Business rates analysis and appeal
ƒƒ Relocation budgeting and planning ƒƒ Service charge audit
"
" ƒƒ Repairs/dilapidations assessment
and negotiation
"
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:

Catherine Penman,
Head of Research
01604 608203
" catherine.penman@carterjonas.co.uk

" Michael Pain, Partner,

Head of Tenant Representation
020 7016 0722
michael.pain@carterjonas.co.uk
"
CAMBRIDGE
"

" "
Luke Wild, Senior Surveyor,
Tenant Representation
020 7016 0725
OXFORD luke.wild@carterjonas.co.uk
"

Tim Atherton, Senior Surveyor,

"
"
Tenant Representation
" 020 7016 0724
" " LONDON
" tim.atherton@carterjonas.co.uk
BATH "
" " Jeremy Gidman, Partner,
" WINCHESTER Head of Asset Management
020 7016 0727
jeremy.gidman@carterjonas.co.uk

020 7016 0720

commercial@carterjonas.co.uk
Berger House, 36-38 Berkeley Square,
London W1J 5AE
carterjonas.co.uk/officesearch

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.