London’s Midtown district has been named as one of the leading office investment markets in Europe. Returns in Midtown hit 8.7 per cent in 2012, edging closer to the West End’s 10.6 per cent and, for the first time in three years, topping those recorded in the City (7.5 per cent).
The figures come from the latest IPD/Farebrother London Midtown Investment Report which also records a 4.1 per cent rise in capital values and rental growth of 4.4 per cent.
This is largely due to businesses relocating to the district. Among those taking space in Midtown during 2012 were Skype (88,000 sq ft) and LinkedIn (46,000 sq ft). More good news was provided by Warner Bros renewing the lease on 133,000 sq ft of office space on Theobold’s Road.
Greg Mansell, head of research at IPD, said; “Strong occupier demand has been a major driver of growth in the London office markets for the last 12 months.
“Midtown has benefitted by attracting a diverse mix of tenants that offer a considerable degree of income security, which is all important to investors in the uncertain economic environment.”
To feed this demand, which is fuelled by a shortage in availability, there is over 700,000 sq ft of office space currently under construction in Midtown. And with Crossrail due to bring a further 1.5 million people to within 45 minutes of the area by 2018, the opportunities for investors are clear.
More good news for Midtown, the area comprising Bloomsbury, Holborn and St Giles, is that its leisure offer and mix of independent high street retailers places it in a strong position to take advantage of future rises in commuters and visitors.
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