London skyscrapers' rental price growth outpaces the rest of the worldComments Off on London skyscrapers' rental price growth outpaces the rest of the world
Those who didn’t believe that London’s new crop of skyscrapers would be a success have been proved wrong, according to real estate firm Knight Frank.
Data from the company shows office rents in the capital are growing faster than in any other major city around the world.
Rental price growth in towers like the Shard and the Cheesegrater has jumped 10.7% in the last six months, more than any of the other 20 major cities ranked by the real estate firm.
London prime office rents are now the fourth most expensive at $122 (£79.02) per square foot on an annual basis.
“When construction started on the latest wave of London towers a few years ago, it was to the backdrop of the Euro Crisis, and some commentators said the developers had got their timing wrong,” said James Roberts, head of commercial research at Knight Frank.
“Oil, tech and private equity companies relocating across London from their more traditional West End locations.”
“However, the doubters have been proved wrong, with skyscraper rents in London at a record high.”
A renewed appetite for exclusive space was partly responsible, Roberts added.
His colleague William Beardmore-Gray said London’s success was also down to companies becoming increasingly footloose.
“London is a good example where these locational barriers are being broken down with oil, tech and private equity companies relocating across London from their more traditional West End locations.”
Hong Kong remains by far the priciest city, with office rents as high as $255.50 a square foot. New York and Tokyo round out the top three, with rates of $153 and $125 respectively.
Six cities, including Dubai and Melbourne, saw no growth, while only Beijing and Moscow saw declines, with rents in the Russian capital down 12%.
San Francisco boasted the second quickest growth, at 8.2%, thanks to expansion in the technology sector.
Knight Frank said many businesses, which would have to pay $105 a square foot for space there, are choosing the city of Silicon Valley.