Member Article

Skyscraper rents maintain record highs despite Brexit

Rental values in London’s booming skyscrapers have maintained their record highs despite the ongoing uncertainty following the EU referendum.

According to Knight Frank’s Skyscraper Index, which monitors rental performance in commercial properties over 30 storeys, has found that skyscraper rents in the capital remained at their record high of $114 per sq ft in the first half of the year.

Average rents in London’s skyscrapers are beaten only by Hong Kong (£278.50 per sq ft), New York ($158 per sq ft) and Tokyo ($149.50) in terms of expense, with San Francisco rents touching $113 per sq ft making up the top five.

Will Beardmore-Gray, Head of Consultancy & Occupiers, Knight Frank commented that rental growth had continued the strong growth experienced in the market over the last two years.

He said: “We have seen strong rental growth in London’s skyscrapers over the past two years, and rents remain resilient in spite of the economic uncertainty arising from the European Referendum result.

“Demand for space in London’s skyscrapers is undiminished with a number of deals done already in the second half of the year at very good levels.”

That being said, the property firm’s figures reveal that while skyscraper rental markets in the Asia-Pacific expanded, including 7% growth in Shanghai and 5.9% growth in Hong Kong, London values remained stagnant at 0% in the first two quarters of the year.

With its Asian rivals booming, and North America rivals also experiencing steady growth, there is the possibility that the market may struggle in the remainder of the year as Brexit begins to drag on the market.