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Over the last five years, London has experienced vast growth in its commercial property rent, with an average increase of 70% in rents in 2011. A lack of supply and sustained requirement for space in the capital has resulted in a ‘perfect storm’ for rising rents, and not just in core London markets. Areas that were once unattractive and not considered viable for occupation are now experiencing rental growth in line with, or even above, the traditional London markets; Shoreditch is the area with the fastest rising rents, with the difference between 2010 and 2015 at 181%.
Average rent in London has increased from £33 psf to £55 psf over the five-year period between 2010 and 2015, with Clerkenwell, Farringdon, Shoreditch and St James all seeing their average commercial property rents doubling; St James now has the most expensive average rent at £91psf, whilst the Docklands area has the lowest at £32psf.
Eugene O’Sullivan, director at tenant acquisition specialist Morgan Pryce, believes the rise in average rents is testament to the strength of London as a focal point for commercial businesses:
“London is the global centre for a huge number of industries and companies are happy to pay the high rental levels in order to be located in and around their target market, clients and competition in the market. With a huge shortage of stock thrown into the mix, we have seen rental levels rise astronomically, especially in the office market, which has led to companies moving slightly further afield and opening up new sub-markets; Shoreditch and the Southbank are great examples of this, and have experienced huge rental growth over the last 5 years.”
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.