Office rents in London's West End could break world records by the end of next year, according to latest analysis.
Rents in the West End, which is home to several large hedge funds, could reach up to £300 ($364) per square foot by December 2024, a report from BNP Paribas Real Estate suggests.
That would make the lettings the world's highest office rentals, topping Hong Kong which has for several years been the most expensive place to lease office space, some reaching £260 per sq ft.
Rents in New York have hit £230 per sq ft in the past but never broken the £300 barrier.
“You don’t need a crystal ball to see where the super prime West End office market is headed," said Simon Knights, head of West End agency at BNP Paribas Real Estate.
"We predicted last year that leasing events, business growth plans and the importance of employing talent would drive the market and all the cynics accused us of being terrifyingly optimistic, and look, we’ve seen rents of over £200 per sq ft regularly discussed on prime buildings."
His prediction of rents of £300 per sq ft is based on several observations, from growth in West End rents to higher demand for office space from banks and financial institutions, and low vacancy rates.
In the West End, the take-up of office space climbed from 520,000 sq ft in the second quarter of this year to 746,000 sq ft in the third quarter, while the vacancy rate stood at just below 6 per cent. In Mayfair and St James’s, vacancy rate of Grade A office properties is 3 per cent.
Banks, hedge funds and other finance houses are the big players behind the surging demand, accounting for 32.6 per cent of take-up across 20 deals totalling 243,000 sq ft.
Meanwhile, prime West End rents in the third quarter stand at about £150 per sq ft, a 7.1 per cent year-on-year increase.
But several deals have beaten that average, including 30 Berkeley Square (£277.50 per sq ft), 65 Davies Street (£185 per sq ft) and 75 Grosvenor Street (170 per sq ft).
Rents in a 'pressure cooker'
Several well-known hedge funds and investment companies have increased their office footprints in the area recently.
Eisler Capital, whose profits rose 73 per cent to £45 million last year, increased its West End office space by 317 per cent.
Meanwhile, Blue Owl Capital and Blackstone expanded their West End office footprints by 475 per cent and 105 per cent, respectively.
“Office-based employment growth statistics, the aggressive expansion of the financial sector and how it compares against the pipeline of stock is massively important to this success story, regardless of whether it slows down or not," Mr Knights said.
"This uptick against the constrained supply will only aggravate bidding even further and will act essentially like a pressure cooker on the rents.
"Reputations are on the line for these predominant occupiers and they will not give up without a fight if the space meets their needs.
"We might see some new kids on the block as a result, sure, but my money is on those guys to continue ruling the school.”
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Your rights as an employee
The government has taken an increasingly tough line against companies that fail to pay employees on time. Three years ago, the Cabinet passed a decree allowing the government to halt the granting of work permits to companies with wage backlogs.
The new measures passed by the Cabinet in 2016 were an update to the Wage Protection System, which is in place to track whether a company pays its employees on time or not.
If wages are 10 days late, the new measures kick in and the company is alerted it is in breach of labour rules. If wages remain unpaid for a total of 16 days, the authorities can cancel work permits, effectively shutting off operations. Fines of up to Dh5,000 per unpaid employee follow after 60 days.
Despite those measures, late payments remain an issue, particularly in the construction sector. Smaller contractors, such as electrical, plumbing and fit-out businesses, often blame the bigger companies that hire them for wages being late.
The authorities have urged employees to report their companies at the labour ministry or Tawafuq service centres — there are 15 in Abu Dhabi.
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Friday
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Troyes v Lyon (7pm)
Marseille v Paris Saint-Germain (11pm)
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
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Starfield
Scoreline
Abu Dhabi Harlequins 17
Jebel Ali Dragons 20
Harlequins Tries: Kinivilliame, Stevenson; Cons: Stevenson 2; Pen: Stevenson
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Freezer tips
- Always make sure food is completely cool before freezing.
- If you’re cooking in large batches, divide into either family-sized or individual portions to freeze.
- Ensure the food is well wrapped in foil or cling film. Even better, store in fully sealable, labelled containers or zip-lock freezer bags.
- The easiest and safest way to defrost items such as the stews and sauces mentioned is to do so in the fridge for several hours or overnight.
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Chef Nobu's advice for eating sushi
“One mistake people always make is adding extra wasabi. There is no need for this, because it should already be there between the rice and the fish.
“When eating nigiri, you must dip the fish – not the rice – in soy sauce, otherwise the rice will collapse. Also, don’t use too much soy sauce or it will make you thirsty. For sushi rolls, dip a little of the rice-covered roll lightly in soy sauce and eat in one bite.
“Chopsticks are acceptable, but really, I recommend using your fingers for sushi. Do use chopsticks for sashimi, though.
“The ginger should be eaten separately as a palette cleanser and used to clear the mouth when switching between different pieces of fish.”
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Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
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The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
