Those of you paying close attention to the figures published in last month’s 2012 London Offices Market Analysis, will have noticed an increase in the South Bank availability rate. The rate is now above 10%, which can be attributed the completion of the Shard and Cushman & Wakefield bringing One London Bridge to market last quarter.
The move is significant, and is representative of an overall hotting up of the South Bank market. At the time of writing, the Shard looks close to securing its first tenants – most likely Al Jazeera and South Hook – with other names being bandied around including China Centre, Winston Strawn and Vanguard, although the latter is perhaps looking more seriously at the Walbrook.
It remains to be seen whether or not the Shard can really open up the market south of the river, but in 2012 CBRE considered the growth of this marketplace reason enough for it to acquire South Bank specialist EA Shaw.
While there were numerous reasons for the acquisition, including EA Shaw’s prominence in the residential sector and the Midtown market, EGi’s data demonstrates the agency’s increasing volume of business in SE1. Furthermore, EA Shaw has topped EGi’s South Bank table for the past three years, having finished second and third in 2009 and 2008, respectively.
CBRE will no doubt be glad of any additional market share it can gain in this market, with significant instructions in the area being well split across the big agents, albeit with Jones Lang LaSalle and Knight Frank enjoying a little bit more than their rivals (see table).
Despite the glut of new-build and refurbished space coming to market on the South Bank, the secondhand market remains strong in terms of asking rents.
Typically, it is when the availability rate drops below 8% that we would expect to see an increase in asking rents. However, the South Bank market appears to be bucking the trend in this respect, with asking rents in secondhand space remaining strong.
All in all, the South Bank market is shaping up for an interesting year. Should the Shard finally secure tenants and the redevelopment of the Shell Centre and Elizabeth House progress, then we may start to see a much needed increase in take-up figures.
| LOCATION | SIZE | MARKETING |
|---|---|---|
| 1 London Bridge | 168,268 sq ft | Cushman & Wakefield |
| The Shard | 589,602 sq ft | Jones Lang LaSalle and Knight Frank |
| The Place | 430,167 sq ft | CBRE and Colliers International |
| Elizabeth House (not actively marketed) | c. 800,000 sq ft | Jones Lang LaSalle and Knight Frank |
| Sea Containers House | 240,016 sq ft | Deloitte Real Estate and Jones Lang LaSalle |
