London rents are on the up, according to Chris Grigg, the chief executive of British Land. He recently updated the market on a strong third quarter, with more than 500,000 square foot of lettings and renewals at rentals that were 5.3 per cent ahead of their estimated rental value.
The group has recently signed a deal with Servcorp, an Australian serviced office operator, who is looking to take space in the Leadenhall building. They will be taking the thirtieth floor of the 45-storey tower, which is due to be completed in June. Servcorp have taken the space at a headline rate of £72.50 per square foot. Mr Grigg said that he “couldn’t think of a higher rent that has been achieved” in the City. Just before the financial crisis Land Securities achieved rents of around £70 per square foot at the new Street Square development. This new deal is well ahead of the average rental deal taking place in the city at the moment.
Mr Grigg said “Our strategy has also been to fill up the bottom half of the tower and then be patient and wait for the demand for the space at the top to grow”. He said, “There has definitely been a pickup in demand”.