Occupancy costs in London have risen most in Paddington and Farringdon despite the delay to Crossrail, according to Carter Jonas’ latest London Office Market Report.
Costs in Paddington have increased 10.7% year-on-year to £111 per sq ft in Q3. The rise was driven by rental growth of 15.4%, which was shared by Farringdon.
Total costs – a combination of rent, business rates and service charges – fell only in Holborn and in Mayfair/St James’s. In contrast, half of London’s submarkets showed a decline last quarter.
Michael Pain, head of the tenant advisory team at Carter Jonas, said: “Elizabeth Line transport connectivity and the availability of larger, better value buildings that enable occupiers to operate more efficiently over fewer floors have attracted some occupiers away from St James’s and Mayfair to districts such as Paddington, Fitzrovia and Bloomsbury.”
Pain added that the rise in costs across London was a reflection of the “hiatus in the property development pipeline” in the wake of the vote to leave the European Union. Rents, he said, are likely to rise from 2020 – provided the UK avoids a hard Brexit.
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