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Office Rents Soar As New Skyscrapers Rise In City

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http://www.independent.co.uk/news/business/analysis-and-features/office-rents-soar-as-new-skyscrapers-rise-in-city-2154178.html

UBS did it in the summer and now, just months later, Bloomberg has followed suit. One after the other, the two have decided to put money in the City. We are not talking about some fancy new financial instrument. No – the pair have decided to invest in bricks and mortar in London's Square Mile, heralding a revival in the capital's office market.

Back in August, the Swiss investment bank agreed a deal to house its new London headquarters on the sprawling Broadgate Estate, owned by the developer British Land and the fund manager Blackstone.

Two existing buildings will be knocked down, paving the way for a new unit boasting more than 700,000 square feet of floor space for the Swiss group's legion of traders and bankers. UBS will rent the property at an initial headline rate of £54.50 per square foot on a weighted average lease of around 18 years.

Earlier this week, we learnt that Bloomberg was following suit with plans for its own European head office in Walbrook Square. The financial-information provider said it had agreed to buy the site, a stone's throw from the Bank of England in Threadneedle Street, from Legal & General, and planned to build two new buildings – one to house its offices and one a speculative development. The architect, Lord Foster's firm Foster and Partners, has been drafted in to design the new headquarters, which will contain more than 500,000 square feet of office space.

The investments come against a pick-up in developments. Commuters passing by London Bridge will have noticed the growth of the Shard, the giant, 72-storey glass-and-steel tower which, when it is completed in 2012, will, at 310 metres (1,017 ft), be Europe's tallest building, and which has been going up at a breakneck, Jack-and-the-Beanstalk-like pace in recent months.

....

But the developments do not mean that the City will suddenly be awash with excess office space. In fact, the supply-side picture remains encouraging, as the development pipeline was effectively turned off when the economy slumped two years ago, according to the real-estate consultant DTZ, which expects prime City rents to rise to £67.5 per square foot by the end of 2014.

For 2010, prime City rents are expected to end the year at £55 per square foot, up by more than 26 per cent on the £43.50 at the end of 2009, according to DTZ. Take-up has also been strong, with people acquiring some 5.7 million square feet of space so far this year. Interestingly, that figure excludes the Bloomberg Walbrook announcement, which, if factored in, would take the total for 2010 to over 6 million square feet, comfortably above the long-term average of 5 million per year.

Nice bit of VI ramping here?

Rent price recovery in just a limited part of the market?

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Like fug they are! I've missed an investment opportunity I suppose! :blink:

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If you walk through the City you can see a huge number of empty offices.

There is also more stock being built, and ready to come online.

Sure, due to the way companies let space means that offices can stay unlet for some time, but I just don't believe that significant rises are on the cards any time soon.

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The skyscrapers are really fantastic in London now. I go to skyscrapercity.com and look at many developments around the world. And now London is building a worldclass skyline. The banksters have overcome the NIMBY's down there. A possible good sign for our future, like a foot in the door?

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The skyscrapers are really fantastic in London now. I go to skyscrapercity.com and look at many developments around the world. And now London is building a worldclass skyline. The banksters have overcome the NIMBY's down there. A possible good sign for our future, like a foot in the door?

I think provided classic views of St Pauls are preserved, and the sky scrapers are relatively clustered in the City and Canary Wharf, the planners are fine with it. There are not so many residents in CW or the square mile. They have a problem further East due to objections from City Airport. I think Ken fancied the idea of a Singapore or Hong Kong style development spread out along the Thames. Might have to if NIMBY's prevent building elsewhere in the country!

Edited by Sir John Steed

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I think provided classic views of St Pauls are preserved, and the sky scrapers are relatively clustered in the City and Canary Wharf, the planners are fine with it. There are not so many residents in CW or the square mile. They have a problem further East due to objections from City Airport. I think Ken fancied the idea of a Singapore or Hong Kong style development spread out along the Thames. Might have to if NIMBY's prevent building elsewhere in the country!

And what if you don't like St Pauls?....

Never understood the fuss over views of one particular building

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I think provided classic views of St Pauls are preserved, and the sky scrapers are relatively clustered in the City and Canary Wharf, the planners are fine with it. There are not so many residents in CW or the square mile. They have a problem further East due to objections from City Airport. I think Ken fancied the idea of a Singapore or Hong Kong style development spread out along the Thames. Might have to if NIMBY's prevent building elsewhere in the country!

Some of the things Ken favoured like mass transit, really come into their own with the mass density. It seems banking, investments, legal, business centers seem to do well with density. Like Singapore, Hong Kong and New York City.

While many other areas of the economy like meat packing or warehousing have moved out of the city centers and to the suburbs.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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