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Office rents across the capital have hit record highs – £180+ recorded in St. James’, £80+ in SE1 and the City Core, whilst prices in historically low-cost areas have seen radical changes from 5 years ago; tenants can now expect to pay at least £50 psf for a prime Shoreditch office space. With demand and a lack of supply inflating costs, development across the Capital has peaked. There is now over 9.5m sq. ft. of office space under development across London, however over one third of this has already been pre-let. This has left tenants with a dilemma – stay in ‘trendy’ areas that are synonymous with their business market, at a potentially higher rental cost, or move to an area that does not wholly fit in with their company profile.
Ollie Salter, surveyor at tenant acquisition specialist Morgan Pryce, believes companies are sacrificing postcodes for more reasonable rental costs in alternative areas,
“The TMT sector has, over the last 5 years, seen a massive shift into Shoreditch, Old St and the surrounding areas, predominantly due to the low rental costs associated with those areas. However, we are now seeing costs in Shoreditch and Old Street reaching mid-high £50s, creeping up towards and beyond City rental levels. There has been a slight shift in the profile of companies that are now moving to the City. SurveyMonkey have recently taken over 5,000 sq ft in the Salesforce Tower, whilst other TMT companies are viewing potential flexible floorplates and lower rent as an attractive proposition.”
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.