Central London prime office rents get big boost from Elizabeth line
Prime office rents along the Elizabeth line’s central London section have leapt, in some cases by 20% since pre-pandemic, as businesses look for the most commuter-friendly locations research shows.
The data comes in the same week Transport for London said 150 million journeys have been taken across the Elizabeth line in its first year since opening in May 2022.
Property consultancy Carter Jonas looked at lettings over 5,000 square feet at new office developments, and found annual rises, and growth ahead of pre-Covid levels.
Liverpool Street and Farringdon average rents had the biggest gains, with the latter standing at £90 per square foot in the second quarter so far, compared with £85 per square foot and £75 per square foot for the same quarters in 2022 and 2019. That is a 20% hike, and over the same period Bond Street recorded the third-highest growth, up 18.2%.
Michael Pain, head of the tenant advisory team at Carter Jonas said a number of new developments have been built in these areas.
He added that part of the rent rises “reflect the desire of many businesses to relocate to areas of central London that offer quick and frequent rail connectivity to Heathrow airport and the key business districts of the capital”.
Guy Grantham, director in the research and economic team at real estate advisers Colliers said all stations within the central section have experienced above average headline rental growth over the past five-years, when compared to London wide figures.
But for some older ‘grade B’ space in in districts served by Elizabeth Line stations, rents “are definitely facing stagnation” according to Grantham.
He said: “The majority of occupier requirements remain focussed exclusively on grade A refurbished or new accommodation.”
Many employers are wanting more ‘green’ buildings, assessing how much workspace they need post-pandemic as they embrace a mix of home and office hours, and looking at what sort of locations will attract and retain staff.