Central London rental values, in the opinion of our rent panel, remained broadly unchanged in the first quarter of 2013 but there were small uplifts in Midtown, particularly around Chancery Lane but also to a lesser extent in Covent Garden and in Victoria.
Availability rates are below the 8% threshold that is generally considered likely to trigger rental growth in three submarkets: West End, City fringe and Midtown.
In all three locations, the opportunities to develop new stock on any substantial scale are limited, although the West End’s supply constraints are mainly in the core markets of Mayfair/St James’s and Soho, where the stock is in smaller buildings. The Shard is expected to attract substantially higher rents of over £55 per sq ft on the South Bank.
The City core continues to offer high-quality office space at a substantial 43% discount to core Mayfair/St James’s markets.
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