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19 July 2018
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LONDON’S SKYSCRAPERS COMMAND PREMIUM RENTS DESPITE BREXIT

Web_LondonSkyline_iStock-622004938
London ranks at five in the global top 10 © iStock

29 September 2017 | Deborah Shrewsbury


Office rents in the capital’s high-rise office blocks are still the most expensive in Europe.


Knight Frank’s Global Cities 2018 report, which examines the rental performance of commercial buildings over 30 storeys, shows that rents remained at US$110 (£82) per square feet in the first half of 2017, about double the rents of tall buildings in Paris ( $58/£43) per sq ft, and Frankfurt ($54/£40) per sq ft. 

 

London is the only European city to rank in the global top 10 – it is number five.

 

Hong Kong’s skyscrapers continue to command the highest rents in the world at $304/£226 per sq ft, followed by New York and Tokyo at $162/£121 per sq ft and $140/£104, respectively. San Francisco, where rents have risen to $117/£87 per sq ft, completes the top five, ahead of London.

 

Knight Frank’s analysis shows Toronto’s skyscrapers are seeing the highest rental growth, rising 11.9 per cent in the first half of the year to $58/£43 per sq ft. Rental growth was also seen in New York (1.8 per cent), San Francisco (3.5 per cent) and Chicago (1.6 per cent), as the recovering US economy and low unemployment rate has revived demand for space in trophy buildings.

 

James Roberts, Knight Frank’s chief economist, said: “That London still commands the highest skyscraper office rents in Europe, despite the Brexit uncertainty, is a statement of its resilience and popularity as a business location. Firms are willing to pay more to be in London skyscrapers than those in Frankfurt because they view the UK capital as a more important international hub.

 

“However, since last year London has slipped from fourth to fifth place in this ranking, and if we keep seeing populist policies which make doing business in the UK more difficult, it is not impossible for London to slide further down the table.  "

 

William Beardmore-Gray, global head of occupier services and commercial agency at the firm said: “These figures are a wake-up call and show that demand for space, and rents, in London’s prestigious towers will only hold up if the city continues to be seen as a top-five centre.”