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Morgan Pryce have recently completed a lease renewal of 3,000 sq ft of office space in the heart of Clerkenwell and just a stone throw away from Farringdon station. Morgan Pryce were originally brought in to clarify exactly what the market rent was for that area, the main reason for this was because when this tenant signed their lease 3 years ago, they achieved a rent of £12 per square foot and couldn’t believe the landlord was now asking for a rent of £32.50 per square foot.
This is a prime example of exactly how this market, the new media hub of Central London has taken off in just three years. Alex Goode from Morgan Pryce believes it is down to a combination of three things. Firstly, there is a huge demand from the TMT sector for warehouse styled space with ideally exposed brickwork, wooden flooring and high ceilings allowing lots of natural light to flood the space. There are almost no converted warehouse spaces in the West End whereas there is an abundance of them in Clerkenwell and Shoreditch.
The second reason, which still hasn’t completely had its full impact is the Cross rail coming into Farringdon station. When this opens, Farringdon will be the only station in London which will have access from the North, East, South and West along with the over ground and underground links. The incredible access and speed this station will provide is dragging tenants into the historically bad connected area.
Finally, it comes quite simply down to the cost. Rents in Central London are amongst the highest in the world and therefore any savings that can be achieved on this overhead is vital. Historically speaking the media and TMT sector has gathered in Soho and Covent Garden, with rents at a stable circa £40 per square foot and business rates in the high teens and low twenties. Clerkenwell has seen a huge spike in rents over the last 3 years but still sits around £35 per square foot with prime space tipping £40 per square foot. However the real savings are in the business rates, with the VOA pushing back the next assessment Clerkenwell is still sitting at their 2007 levels of around £10 per square foot.
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.