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Historically, the Hammersmith office market was shunned by the Core West End and behaved as its own separate market. The general feel of the area has always been rather grungy and provided lower quality space than the core markets, and the rents reflected this. However, over the last two years the Hammersmith market has been evolving to become an extension of the West End.
Due to the lack of office supply and increased demand for office space in Central London, there has been an increase in the amount of speculative office developments and investors are dying get involved. In the past new buildings were often fully pre-let before construction began but recently buildings are going up with no pre-letting’s arranged, a clear sign of investors’ confidence in the market. According to Andrew Ingram a surveyor at Morgan Pryce, “there is currently 9.5m sq. ft. under construction with just 37% of that being pre-let.”
As expected the high levels of foreign investment and the many UK funds bidding on the limited developments and existing buildings have supressed yields to under 5%, everyone is keen to get on the back of the growth and success of the Hammersmith market. In 2012 grade A rents were mid £30’s psf but at the start of 2015 they had reached £50 psf. Asking prices are regularly shattered as parties over bid to secure property, for example when AXA Real Estate Investment Managers secured the purchase of 77 Fulham Palace Road for £82m, £13m over asking.
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.