The gap between prime office rents in London’s Southbank and the City has fallen to its lowest level since records began, according to analysis by Knight Frank.
Prime office rents in the City core are now £66.50/sq ft compared to £62.50/sq ft in Southbank – a gap of just 6%. The rental gap between the two areas was 18.2% in 2010.
James Roberts, head economist at Knight Frank, said upper floor rents in iconic buildings are now similar in the two areas and that he expected the rent gap to disappear altogether in the coming years.
In 1990, the rental gap was 57.1%. This figure has gradually diminished in the years since, except for a blip after the 2008 economic crash. Roberts said: “To maintain the momentum, Southbank will need to continue delivering modern office stock. The recent sale of One and Two Southbank Place to Almacantar should clear a path to the next wave of development.
“At £550m, this is the largest property deal ever completed on London’s South Bank, excluding estates, and the second largest commercial property deal in central London so far this year.”