Big Leasing Deals Show Pre-Lets Are Still Possible If The Space Is Right
If you’ve got an environmentally sustainable office building in the right location, then companies are still willing to pre-let space on long leases.
That is the conclusion to be drawn from a scroll down the list of the biggest leasing deals in London since the beginning of 2021, when signs of life began to return to the leasing market.
The London office leasing market is not yet back to pre-pandemic levels: Around 8.5M SF of office space was leased in central London in 2021, JLL said. That is about 80% higher than the 4.7M SF leased in 2020, but it is still only 87% of the 10-year average 9.9M SF leased. Savills is predicting 2022 should see leasing levels similar to or a bit ahead of 2021.
But big deals are being done, and in the main, they are being done on long leases at rents that match or even exceed 2019 levels.
“We continue to see major corporate occupiers taking large requirements in central London,” Savills Head of Central London Office Leasing Jon Gardiner said. “These companies see the capital as a key tool in the war for talent. They are looking for amenity-rich, well-connected urban campuses and, in a similar vein to places like King’s Cross that have successfully emerged over the past 20 years, we are on the cusp of seeing a raft of dynamic new places which will become the fabric of a new London office market that serves opportunity-led occupiers.”
Here’s a rundown of the eight biggest leases of the last 12 months, drawn from Savills data. All of them are rated BREEAM very good or higher.
Facebook at 1 Triton Square
Even as companies try to work out their post-pandemic office requirements, Facebook has continued to hoover up new space in London (see also No. 5 on this list). In September 2021, the company took over 312K SF of existing space from Aegis at British Land’s 1 Triton Square office building in Euston on a 15-year lease.
Allen & Overy at 1 Broadgate
Law firms are well represented among the largest leasing deals. The largest such deal was Allen & Overy moving across the road from One Bishops Square in the City to British Land and GIC’s redevelopment of 1-2 Broadgate. It signed a pre-let for 267K SF, less than half of the 540K SF it occupies right now.
Hogan Lovells at 14-21 Holborn Viaduct
In signing a pre-let for 264K SF at Royal London Asset Management’s 14-21 Holborn Viaduct, law firm Hogan Lovells is only moving a few yards up the road from its current home. It has signed a 20-year lease.
Latham & Watkins at 1 Leadenhall
Latham & Watkins’ 246K SF pre-let at Brookfield’s 1 Leadenhall office tower in the City of London was a deal that allowed the Canadian giant to push the button and start development of the building. It will be hoping to repeat the success it had at 100 Bishopsgate. Latham took a 15-year lease.
Facebook at Building S3, King’s Cross
In October 2021 Facebook committed to take 203K SF in building S3 on York Way in King’s Cross, on top of the 620K SF it already leases at the scheme.
Travers Smith at Stonecutter Court
Ivanhoé Cambridge bought Stonecutter Court on the western fringe of the City of London in 2014, and in August 2021 announced that it had secured a 158K SF pre-let on a 15-year lease from law firm Travers Smith that would facilitate the redevelopment of the building into a new 250K SF office. Allianz is a joint venture partner on the deal.
T. Rowe Price at Warwick Court
Warwick Court is one of several offices in the City that were vacated by Goldman Sachs in the last few years, as the investment bank consolidated its operations into a new office. The building is being redeveloped by Mitsubishi Estate and Stanhope, and the duo have secured a pre-let from broker T. Rowe Price, which is taking 144K SF on a 15-year lease.
The Office Group at building R8, King’s Cross
Up to the end of 2019, the chance of putting together a list like this and it not featuring WeWork would have been pretty slim. In fact, there is only one flexible office provider on this list, The Office Group, which in August last year agreed to take a pre-let on 138K SF at building R8 in King’s Cross.