Take up of office space along the Capital’s Southbank is set to double this year because of growing demand from the media industry, according to research from Knight Frank.
The leading independent property consultancy reports that nearly 700,000 sq ft of office space has been acquired on the Southbank in 2013 so far, compared to 568,000 sq ft in the whole of 2012.
Moreover, there is a further 439,000 sq ft of deals which are in advanced negotiations, which means full year 2013 take-up should exceed 1.1 m sq ft. This will be the highest level of office take-up recorded in the market since 2007.
Stephen Clifton, Head of Central London Offices for Knight Frank, said: “The Southbank has undergone a radical period of change over the past decade and this transformation is set to continue well into the next decade. Southbank is no longer a fringe location in the Capital as it has a tenant base one would associate with a core business district – the polarity of London’s business market is changing.
“Traditionally, investors have struggled to find the right stock across the river, but in the Southbank there is more office stock than in Birmingham city centre. This is an emerging city within London, and investors should look closely at the opportunities it offers to tap into the capital’s economic recovery.”
Major leasing deals signed in 2013 include:
• News Corp, which includes Dow Jones, Harper Collins and News UK, – print media – 430,000 sq ft – The Place, London Bridge Street (part of the London Bridge Quarter, the estate which includes The Shard).
• Aljazeerah – broadcaster – 28,000 sq ft – The Shard.
• Four Communications – PR – 14,000 sq ft – 20 St Thomas’s Street.
Major deals under offer:
• Ogilvy & Mather – advertising – 230,000 sq ft – Sea Containers House.
The Southbank has strong links to the media and creative industries. It is home to ITV’s Television Centre, the Financial Times, as well as magazine groups, IPC and UBM. There are also connections with the cultural sector, with the Old Vic and National theatres; as well as the Tate Modern art gallery. This mix of arts and creativity make it an attractive environment for media firms. Also, prime rents are 30% lower than in the media hub of Soho, or neighbouring Covent Garden, which adds to the appeal.
London Media District Prime Rents*:
– Southbank: £47.50 per sq ft. *
– Soho: £67.50 per sq ft.
– Fitzrovia: £65.00 per sq ft.
– Covent Garden: £67.50 per sq ft.
*Based on a notional letting of 10,000 sq ft of new or refurbished grade A space, excluding upper floors in towers, trophy buildings and estates such as London Bridge Quarter and Southbank Place
“In Knight Frank’s view the South Bank is one of the Capital’s sub markets, which will outperform the market in the short to medium term,” explained Stephen Clifton.
“The quality of office stock has been transformed, and although rents are rising, they are competitive compared to other media districts in Central London. This is obviously fuelling occupier interest but there is also something unique about the Southbank, which is the sheer variety of space available and the buzz generated by the arts and culture scene prevalent along the Thames and vastly improved transport infrastructure at London Bridge, in particular. It is these factors allied to its direct lines to the City and West End, which really make the Southbank stand out in the current market.”
