Midtown rents could surge after the £60 per sq ft barrier was broken this week.
US law firm Covington & Burling has won a bidding war with technology company F1 Computing to take a prelet on Clements Inn, 265 Strand, WC2, at £645 per sq m (£60 per sq ft) for 25 years.
Initial bidding for the 7,075 sq m (76,161 sq ft) scheme, being developed by Howard Ronsons HRO, is believed to have started below £592 per sq m (£55 per sq ft) late last year but quickly rose as demand for space continued to outweigh supply in the area.
The deal smashes the £560 per sq m (£52 per sq ft) Midtown record set by Sainsburys at Lord Hamlyns 30,738 sq m (330,872 sq ft) Holborn Place scheme in Holborn Circus, EC1, last year.
Covington, advised by CB Hillier Parker, is expected to leave its London HQ at Leconfield House, Curzon Street, W1, when Clements Inn is completed in July.
A source close to the deal said: “The closest we have seen in that immediate area is when Manches took the neighbouring Aldwych House at £52 per sq ft 10 years ago. I never imagined we would see £60 hit this far east, but traditional West End tenants are forced to find cheaper space. The ripple effect could be staggering for other Midtown schemes.”
Predictions of £50-plus per sq ft lettings becoming the benchmark rather than the exception have been confirmed by news that part of Bernhard Garbes Victoria House scheme in Bloomsbury Square, WC1, is close to being prelet at around £581 per sq m (£54 per sq ft).
Recruitment firm Michael Page is thought to be close to taking 7,432 sq m (80,000 sq ft) of the 20,438 sq m (220,000 sq ft) scheme, being marketed by Weatherall Green & Smith and Nelson Bakewell.
The source added: “Lots of occupiers are scanning the area. F1 is left with few options if it wants to move in this year. It will either have to change its timescale or its location.”
EA Shaw is advising Michael Page and Chesterton is acting for F1. Jones Lang LaSalle and Healey & Baker are letting agents on Clements Inn.
EGi News 11/05/01
