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One of London’s most exclusive areas is soon to have a new landmark, 10 Portman square. Designed by London-based architects Jestico + Whiles and located in London’s West End, the building comprises 113,000 square feet of modern office space over eight floors. The development is due to be completed in April 2013.
The developer, British Land, is Europe’s largest Real Estate Investment Trust (REIT) with total assets, owned or managed, of £16.3 billion. Its property portfolio is focused on prime retail locations and Central London offices which attract high-quality occupiers committed to long leases. It has now secured its second tenant for the development in the West End of London, boasting over 40% of the available office space pre-let. British Land’s latest letting is to Aramco Overseas Company UK Ltd, the UK affiliate of the Saudi Arabian oil company, which has agreed to take 24,392 square feet of office space. The company has agreed to lease the fifth floor and part of the fourth floor at a headline rent of £92.00 per square foot on the fifth floor and an overall average rent of £90.76 per square foot on new 15-year leases, without break, and with 24 months’ rent free.
The latest commitment to offices at the site could hardly have come from a more high-value client, with Aramco UK’s oil-producing parent company among the most lucrative business enterprises anywhere in the world.
The announcement comes a week after it was confirmed that investment manager Aspect Capital Limited has also taken 24,520 square feet of office space on the top two floors of the building. The two lettings mean that the offices at 10 Portman Square are now 43% pre-let with the development on schedule to be completed in spring 2013.
Portman square is part of the Portman Estate, and is located at the western end of Wigmore Street where it connects to Cavendish Square and lies within Marylebone. Marylebone is an affluent inner-city area of Central London in Westminster and its boundaries are Oxford Street to the south and Marylebone Road to the north. Today the area is mostly residential, though there is significant availability for offices in Marylebone and these tend to be in older commercial buildings with large floor plates. As many of these Marylebone office spaces are being redeveloped, short-term/good-value deals are often available.
The popularity of offices in Marylebone is highlighted by the fact that this deal took place against the background of the Eurozone crisis. However, Tom Lax, Senior Surveyor at Morgan Pryce, has commented, “This rise in rents is not a surprise. Given the lease term the tenants have secured – 15 years with no break – it suggests there will be no rent review after five years, which allows the landlord to demand a much higher rent from the outset.”
Morgan Pryce is 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.