Market snapshot

Office Market Pulse Central London Q2 2013

The second quarter of 2013 brought the news of Saatchi & Saatchi agreeing to pre-let Derwent London's Turnmill Building and 49 Chancery Lane. This is just the latest deal highlighting an emerging trend of occupiers in Central London actively securing offices still in development and before they come to market.

Pre-let deals spur speculative development

Other pre-let deals include Ogilvy & Mather who are under offer to take 225,000 sq ft of space at Sea Containers House, SE1, Liberty Insurance's acquisition of 117,000 sq ft at 20 Fenchurch Street, EC3, and Amlin Insurance's pre-let of 111,000 sq ft at The Leadenhall Building, EC3.

Derwent London has had a run of successes, starting with the pre-let of 127,000 sq ft to Burberry at 1 Page Street, SW1, in 2012. The added confidence brought by the pre-completion lettings to Unilever and Hill & Knowlton at the Buckley Building, EC1, spurred the developer to announce the speculative commitment to their 226,000 sq ft 'White Collar Factory' concept office scheme on Old Street Roundabout, EC1.

Given the shortage of floor plates in excess of 50,000 sq ft in 'Tech City', we expect to see occupiers actively securing space before it comes to market post-completion, in line with the wider Central London market trend.

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In this issue:

Key transactions in Central London Q2 2013


Size (sq ft) 

Landlord(s) / vendor

Tenant Lease information
Sixty London, EC1 200,000 AXA Amazon £55.00 per sq ft
12-14 New Fetter Lane, W1 136,000 Great Portland Estates Bird & Bird £58.80 per sq ft
Leadenhall Building, EC3 111,800  British Land  Amlin Insurance £62.75 per sq ft 
Walbrook Building, EC4 98,000 Minerva Worldpay £57.50 per sq ft
40 Chancery Lane, WC2  97,400  Derwent London  Saatchi & Saatchi  £58.50 per sq ft 
Turnmill Building, EC1  58,200  Derwent London  Saatchi & Saatchi  £53.00 per sq ft 
200 Aldersgate, EC1*  22,000 Helical Bar plc Citizens Advice £40.00 per sq ft
1 Euston Square, NW1*  12,000  Euston Estate Shepherd Construction £42.50 per sq ft 
* LSH advised on this transaction

Central London office rents

  • Prime Central London rents rise across several submarkets in Q2 2013 when comparing with the same period of 2012.
  • Headline Q2 2013 rents in Central London reach £98 per sq ft in Mayfair, an increase from £92 per sq ft in Q2 2012.
  • Victoria office market resurgent as rents hit £70 per sq ft, the highest value since 2008.


Development Q2 2013: Speculative development at Old Street Roundabout

Derwent London has announced its intention to proceed with the 226,000 sq ft White Collar Factory commercial scheme on Old Street Roundabout. Construction will commence in January 2014 with a target completion of 2016.

Speculative and high volume concept

The developer has produced a concept designed around high volume space featuring 3.5m floor to ceiling heights and passive cooling combining embedded water pipes in the building's slab, manually operated windows and a running track on the roof. The scheme has the innovative features designed to appeal to TMT occupiers looking to locate in the Old Street Roundabout area.

Central London office developments

Property  Size (sq ft)  Developer(s) Due date
White Collar Factory, EC1 280,000 Derwent London H2 2016
1 & 2 Fitzroy Place, W1 310,000 Exemplar / Aviva Q4 2014
62 Buckingham Gate, SW1 257,000 Land Securities Q3 2013
One Pancras Square, N1  55,120  Argent Q4 2013
Two Pancras Square, N1 123,000  Argent  Q1 2014 
Alphabeta, EC2  220,000  Galliford Try  Q2 2014
One Mabledon Place, WC1 120,000 Stanhope Q1 2014

Spotlight on Victoria office market

  • We have seen an influx of non-governmental occupiers locating in Victoria: TMT, Oil and Gas, corporates, PR firms and luxury retail brands.
  • First half of 2013 has slight slow-down in volume of transactions in occupier and investment markets.
  • Q2 2013 headline rents increased to £70 per sq ft, the highest values since 2008: a resurgence in the market.
  • Largest deals in 2013: John Lewis take 35,000 sq ft in 123 Victoria Street and World Fuel Service Europe take 24,000 sq ft in 62 Buckingham Gate.
  • Space released by government creates potential opportunities for investors to convert office stock to alternative use.
  • Major regeneration of area surrounding Victoria Station set to transform the local market. 

Click here for a more in-depth analysis of the Victoria office market.

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David Earle

020 7198 2270

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David Earle
Head of Central London Office Advisory

020 7198 2270

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