Centrally located Fitzrovia has a bit of everything: the stature and wealth of Marylebone to the east, the energy of Soho to the north, and the patina of glamour that comes from having celebrity residents and media companies build swanky trophy towers. Bisnow talked with Colliers director of research and forecasting Guy Granthem about the central submarket that is so hot nobody can get in.
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Guy (shown here on holiday) tells us Fitzrovia is quickly becoming a creative hive of young professionals, like the people who work at Facebook. The social network recently leased most of Great Portland Estates’ new Rathbone Square development near Tottenham Court Road (both shown below). Colliers repped the landlord in that transaction,.
Estee Lauder also recently took space at 1 Fitzroy Place. Guy says those two tenants lifted the profile of Fitzrovia dramatically. Those companies and many other creative upstarts are buying into the lifestyle that Fitzroy provides – the shopping, the slew of dining choices, the amenities.
Rents have increased accordingly, Guy says. Estee Lauder paid £80/SF while Capita recently paid an average of £86/SF at Derwent’s Copyright Building. It’s a dramatic uplift from the mid-60s to the mid-80s.
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Despite the challenging environment that we are moving into, there will still be demand for space and new supply is set to be minimal over the next 18 months, Guy predicts. Great Portland Estates plans a 90k SF refurbishment at 76 Oxford Street and will add significant retail space.Facebook already has an option on that space.
Derwent’s new development is set for 80 Charlotte Street, the longtime Saatchi and Saatchi headquarters.The 240k SF building is being renovated but will not be ready for two more years.The 120k SF 1 Oxford will be complete in 2020.
In addition, Derwent could combine two buildings, including The Network Building, to create the new structure will comprise of about 100k SF just off Tottenham Court Road.
The Tottenham Court Road Cross-rail station which is set to come online in 2018 will boost interest further. In addition Camden Council has secured a £26M investment which will be used to introduce traffic calming, a two-way tree-lined street as well as bringing significant improvements to the public realm.
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The lack of vacancy isn’t really a surprise with those kinds of dynamics at work. Only one thing could potentially soften the market: Brexit. Guy tells us that there has only been a minimal impact so far, with just a small number of deals curtailed due to Brexit. If occupiers are leaving, that will allow a little more air into the market, with maybe a few subleases even becoming available. But even that is unlikely cause a major demand supply imbalance, Guy says.
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