Office rents in Knightsbridge, SW1, the most opulent area of Kensington and Chelsea, are beginning to resemble levels of Mayfair, W1.
According to Knight Frank's Mike Sadler, private equity firm MGPA took 10,000 sq ft last December in Deka's 60 Sloane Avenue, SW1, at £80 per sq ft. Sloane Street and Brompton Road, SW3, have topped that with deals done, at more than £90 per sq ft and £100 per sq ft respectively, in the past year.
It is difficult to ascertain the extent of the rental increase, but Sadler points out that he let top-quality, seconhand space in Brompton Road last year at £75 per sq ft, up from £45 per sq ft in 2006.
Further west, rents struggle to reach £50 per sq ft. However, Sadler says: "Rents have leapt a lot more than in other parts of the borough because the alternatives in Mayfair are so expensive."
Expect space to remain scarce and exclusive over the next two years. Deka is building an additional 10,000 sq ft at 60 Sloane Avenue but, beyond that, few developers are active, and supply is likely to remain tight.
By Estates Gazette, 02/02/08
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