‘World’s Highest Ever’ Office Rent Secured in London
Berkeley Square Offices Leased for £277.50 Per Sq Ft, Smashing Previous UK Record and Thought to Top Hong Kong Deals
Mercury Group has secured the UK’s highest office rent, at an eye-watering £277.50 per sq ft.
CoStar News understands that a private family office has signed to take 2,700 sq ft on the sixth floor at Mercury’s 30 Berkeley Square in Mayfair, a new high watermark for office prices in the UK. It is also thought to be the world’s highest recorded rent.
30 Berkeley Square, which sits in the heart of London’s hedge fund cluster, already holds the record for the previous highest rent paid in the UK, the circa £250 per sq ft paid last year by Steadview.
That was more than 30% above the £190 per sq ft paid by fashion investment tycoon Lawrence Stroll in St James’s in 2017 to secure the previous record.
It is also likely the world’s highest ever office rent. Hong Kong has for several years been the most expensive place to rent office space with prime rents having got to $340 US dollars (£263 per sq ft), according to JLL. Rents in New York are understood to have hit £230 per sq ft in the past, but the £277 per sq ft barrier is not thought to have been broken.
The price point is a clear outlier in a year which is expected to see a stark fall in leasing activity and rental growth.
Mark Stansfield, head of analytics in the UK, said: “The letting at a remarkable £277 per sq ft signals the resilience of the super-prime end of the market in London, and the enduring cache of a Berkeley Square address. That the landlord is understood to have refused lower offers for the space, adds to the point.
“However, with demand well down across London and the West End this year, this deal does represent something of an outlier. Average rents in the West End fell by just over 4% on an annualised basis in Q2-Q3 2020. CoStar’s base case forecast is for rents to decline further over the next couple of years, before a recovery begins in 2022.”
The office block is also home to the Phillips auction house, which moved in seven and a half years ago after Mercury Group bought the scheme from Prudential’s property investment arm for around £100m in 2012.
Pilcher London acted for Mercury while the tenant was represented by William S Martin.