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London’s office market has experience vast growth over the last few years, with rents rising rapidly over the last 18 months. A lack of supply paired with huge demand has meant rents in the capital have reached record levels; St James has seen a deal at £185 psf, whilst you can now find non-tower city space for £80 psf. Rents are expected to continue to slowly rise this year, before the supply slowly starts to take to the market in 2017 – there is potential for records to continue to be broken.
However, London is not the only city that has experienced record rental levels in its office market. New York has potentially just seen the highest office rent from anywhere in the World. Citadel, one of the city’s biggest hedge funds – owned by billionaire Kenneth Griffin – has just agreed to take 200,000 sq ft at 425 Park Avenue. Citadel will take the penthouse space in the L&L development, due for completion in 2018, at a staggering $300 psf (c.£209 psf), a massive £24 higher than the record rent achieved in St James.
Eugene O’Sullivan, director at tenant acquisition specialist Morgan Pryce, believes the mega-deal at 425 Park Avenue is a once-in-a-lifetime deal,
“The recent agreement at 425 Park Avenue is similar to that achieved at 8 St James’s Square, when The Helly Nahman Gallery signed up for a 15 year lease at £185 psf. Whilst these deals show the strength of both prospective markets, they are anomaly’s in the sense that they are by far and away at much higher levels than other rents in the area. The 425 Park Avenue development for example is letting space on lower floors for around $175 psf (£122), which is more in keeping with the area and prices. These deals are incredible, but rare.”
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.