Average rental growth next to well-connected London tube stations from 2014-19
Old Street Rental Growth displays an increase of 46.7% over the past 5 years
The market for offices near thriving commuter hubs and well-connected London tube stations have experienced a stronger rental growth in Central London in the past 5 years (2014-19). You can see the image above, the data collated by BNP Paribas Real Estate. Offices within 900m of Old Street and King’s Cross St Pancras underground stations are among those to have seen a larger than average rental growth. These figures display an increase of 46.7% and 45.7% respectively. While, on average Central London has seen a surge of 39%.
‘The increase in rents near Old Street station is explained by the rise in tech companies there’ says Dan Bayley, Head of London City Leasing at BNP Paribas Real Estate. In 2004, he added ‘most of the office providers there were pretty cheap’. Since then, landlords have responded to the demand and matched it with market-leading office quality. This is what has been seen at King’s Cross, which from a standing start has become one of the most sought after locations in Central London. During this time, Barbican station saw rents rise by 44.6%. This is fundamentally down to the new Crossrail station that is set to open there and the new builds coming through. While other office rental near tube stations was below average. These include Covent Garden (18%), Holborn (15%), Embankment (17.3%) and London Bridge (28%).
This year the BNP Paribas Real Estate team is expecting continued rental growth, but take-up to be lower because of lack of stock and deals happening this year. Potential occupiers ‘can’t wait until 2021; they need quite a large amount of space now’, however, there is a smaller pipeline of new grade-A offices in Central London coming through than last year, many of those are paying a premium.
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