Office occupiers are finding new appeal in Farringdon, according to the team at tenant-only agency DeVono.
DeVono, which has moved to new offices in the area, said in a report that last year saw record take-up of 1.4m sq ft – almost 2.5 times that of 2022 and against a five-year average of circa 630,000 sq ft.
HSBC’s 556,017 sq ft prelet of Panorama and Orion Capital Managers’ redevelopment of the former BT headquarters at 81 Newgate Street, EC1, helped to drive deal volume, as did ICE Futures taking 139,424 sq ft at Greycoat and Mitsui Fudosan’s nearby Sancroft scheme and Sainsbury’s taking 70,000 sq ft at Helical’s JJ Mack Building.
“The increase in larger firms leasing is not an exception to the wider market but is instead part of a wider incursion into Farringdon by firms of all sizes,” DeVono said, noting that last year saw a post-pandemic peak in activity with 160 firms taking spaces, up by 27% on the short-term annual average.
Financial services tenants accounted for some 54% of take-up over the year, with all sectors taking more space than a year earlier, except for the serviced offices and technology sectors.
“This not only reflects the diversity of character and quality of the offices in Farringdon and their appeal for a variety of sectors, but also that a Farringdon location grants a number of benefits valued by occupiers of all types, including the presence of amenities such as Leather Lane food market and excellent transport links with access to the Elizabeth Line, Underground and National Rail lines.”
The opening of the Elizabeth Line means Farringdon occupiers “have been forced to get to grips with the rapid rental growth that has set in since”, the agency said. Grade-A rents have risen each quarter since the line opened in the second quarter of 2022, pushing past the £100 per sq ft mark a year ago and now standing at £115 per sq ft.
“Occupiers searching for new space or preparing for a rent review may be surprised to hear that grade-A rents are now up by 44% on the level recorded five years ago,” DeVono said. “For context, the only submarket to have seen more rapid rental growth over this period is Mayfair, and even this growth has been confined to its super-prime spaces.”
The best grade-B options are priced at £70 per sq ft, the agency added, with upward pressure “far less significant” than that of grade-A. Second-hand space accounts for more than three quarters of the space available in the area.
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