While it is Apple’s 500,000 sq ft deal at Battersea Power Station that grabbed the headlines during Q3 2016, it is small, creative and media companies that are driving the South London and South Bank office market, according to a report from local property expert Kalmars.
The firm’s Q3 market report reveals that there was a significant increase in activity in the area by SMEs.
Kalmars’ Adrian Gurney said: “The Apple deal has well and truly established the whole of the South Bank as a major office location that’s attracting businesses that would not previously have considered moving here.
“While rental levels have increased, relative to other London Markets overall occupancy costs in the South Bank still offer good value and the area’s authenticity and culture, combined with the good availability of offices in a range of sizes and styles, has made it highly attractive to creative and technology companies. Over two million square feet of offices have been taken by such businesses in the past three years.
“The average rent for offices in the SE1 market currently stands at around £50 per sq ft, but with quoting rents averaging around £53 per sq ft, it is easy to imagine further growth in the mid-term. This upward pressure is due to the falls in availability which fell sharply during the quarter, from 8.2% to 4.6% by the end of Q3.”
“The market had a strong year in 2015 and, in relative terms, this year has proved more turbulent. Despite the initial shock following June’s referendum the market has remained reasonably robust and the structural changes that we are seeing in South London are likely to ensure that the area performs better than other areas of the capital.”
