Fitzrovia has come a long way since I first started working in London’s West End leasing market in 2004.
Ten years ago, my first instruction in Fitzrovia was The Met Building, in Percy Street, W1, for Great Portland Estates. This was the best building available in the submarket then and achieved rents per sq ft in the £40s – a real breakthrough at the time.
However, this was significantly below prime rents in other West End markets and accurately reflected Fitzrovia’s status as a fringe part of the West End office market.
Fast-forward a decade and Fitzrovia has been transformed. Its “rag trade” past and close proximity to a tightly supplied Soho has made it a popular destination for creative industries. New developments such as the Qube, Wells & More, 180 Great Portland Street, 60 Great Portland Street – the list goes on – have played an important role in changing occupiers’ perceptions of the market, in turn attracting a new “corporate” type of occupier.
Of course, not only has this new development changed the composition of supply – grade A now accounts for twice what it did 10 years ago – but it has also re-aligned pricing to the point where prime rents have broken through the £70 per sq ft mark, which sits 60% up on where they were 10 years ago.
The pace of rental growth since 2004 has been very strong relative to other West End markets. But, in my view, the best is yet to come.
In recent years we have seen a new generation of schemes such as Cardinal Place, SW1, and AirW1, W1, transform the Victoria and Soho submarkets with a corresponding uplift in rental tones. I believe a similar phenomenon is about to occur in Fitzrovia.
Not only do we have more than three times the long-term average of new development completions scheduled for delivery in the next five years, but for the first time in the history of this submarket a
new generation of stock is arriving – stock that is not only of the highest quality but, and this is the important bit, of a critical mass.
Firstly we have the imminent delivery of Exemplar’s, Aviva’s and Kaupthing’s 1 and 2 Fitzroy Place, W1, this summer.
Demand for this new space is extremely strong, as demonstrated by the recent news that the whole of the 140,000 sq ft of 1 Fitzroy Place is under offer to Estée Lauder, (according to EG’s reporters – 11 January, p34).
Thereafter we will see GPE’s One Rathbone Square in two years’ time, followed by Derwent London’s eagerly awaited The Charlotte Fitzrovia, both of which have the scale and prestige to continue to transform the area.
The icing on the cake is Crossrail, the civil engineering construction works that are planned to be completed in 2017. The £1bn spend programme at Tottenham Court Road is the most significant transport investment in the West End for decades and will further enhance Fitzrovia’s attraction.
The scale of change in this area has triggered a huge surge in confidence, and the office sector is starting to see the benefits that are on an upward trajectory.
Emma Crawford is Central London executive director, CBRE
