This month saw another increase in office rents in the country’s capital. Offices in Clerkenwell and Shoreditch were the biggest movers again this month as prime office space saw rents increase from £37.50 in Shoreditch to £40 per square foot. Clerkenwell experienced the same sort of increase; £42.50 to £45 per square foot. So how are rents being pushed up, against this backdrop of such economic gloom and European uncertainty? 

Knightsbridge was originally a small hamlet outside the City of London, between Chelsea and Kensington and is home to many of the world’s most expensive shops, including the department stores of Harrods, which was recently purchased from Mohammed Al Fayed by the Qatari royal family, and Harvey Nichols. The district also has banks that cater for rich individuals, such as Coutts, the bankers for the Queen.

The business rates you pay for your demise depends on its ‘rateable value’ and this value is calculated by the Valuation Office Agency (VOA), which is a governmental body. The business rates are calculated as a percentage of the rateable value – the multiple at the moment is 43.7 for standard businesses and 43.0 for small businesses in London. Properties are evaluated either by the traditional rental approach, the contractor’s basis or the profits method. 

Shoreditch, located north east of the City and covering Commercial Street, Brick Lane and Shoreditch High Street, has appealed to many companies leading to the steady rise of office rents: grade-A office space can now  reach  £61 per square foot. Agents at Morgan Pryce, London’s commercial office acquisition agent, have noticed that the more creative industries, primarily the technology and media-based companies, are those whose interest in working within Shoreditch has been deepening. 

Helical Bar plc announced on 28th November that it, along with CrossTree Real Estate Partners, also known as CrossTree, has exchanged contracts for the purchase of a whopping 3.12-acre site. The property sits directly opposite the recently dubbed ‘Silicon Roundabout’ – the new technological heart of London. The site has been acquired for £60.5m and is being funded by cash with a bank debt of around £30m. CrossTree will own a 67% stake of the freehold interest while Helical will own the remaining 33%.

Belgravia is located in the West End of London in the City of Westminster and is home to a number of large embassies which are located around the areas of Belgrave Square and Eaton Square. Belgravia features some of the most elegant and expensive houses in the world, and is one of the most fashionable places in which to own a home in the capital. A large proportion of Belgravia was originally owned by Richard Grosvenor, the second Marquess of Westminster.

Mayfair, which was originally called The May Fair, is an area of Central London located within the City of Westminster. Over the years this district has evolved into predominantly commercial use, with many former homes having been converted into offices for major corporations’ headquarters, embassies, hedge funds and real estate businesses. There does still remain a substantial quantity of residential property, however, as well as some exclusive shopping areas and Mayfair also has London’s largest concentration of luxury hotels and many restaurants.

Angel Islington runs from around Angel underground station along to Kings Cross and Old Street underground station. The area is largely dominated by residential property and, due to its good access to West End and the City, has become an increasingly desirable place to live. There still remain a fair number of offices in Islington which tend to be a combination of period and 1960s buildings which have relatively low floor-area space.

If you ask most property professionals where the demand for office space is at the moment they will tell you all about media space. Converted warehouses with exposed brickwork and stripped-back ceilings represent the kind of space that all young, dynamic companies want to occupy. 

Earls Court in terms of property is dominated by residential buildings with close to no office space whatsoever in the area. The area primarily consists of listed Victorian terraces and these properties generate a much greater income as residential use. The only real office space in Earls Court is within the skyscraper, Empress State Building, but this only has one tenant: the Metropolitan Police Service.