Vacant possession values for City offices have increased by an average £240 per sq ft since 2014, according to Savills.
New research shows that the price of vacant space has more than doubled to £700 per sq ft since 2010, when it stood at £300 per sq ft.
The increase is driven by declining vacancy rates across central London, rising rents and increased availability of finance for speculative refurbishments, according to the agent.
Central London investment director Rob Buchele said: “Not so long ago £700 per sq ft would have represented a respectable investment value and today this is what we are achieving for vacant possession schemes. A good example of this is the recent sale of 24-30 West Smithfield in Farringdon which Savills sold on behalf of the former owner occupier for £735 per sq ft after receiving 25 formal offers.”
The agent sites the examples of 23-39 EastCheap, EC3, which sold in March for £772 per sq ft, and 25 and 28 Easton Street, WC1, which was sold for £794 per sq ft.
