Midtown office news 7th March 2016

Rents in Midtown are set to reach £77 per sq ft according to new forecasts by agent Farebrother. Farebrother has created a bespoke forecasting model for Midtown in partnership with Real Estate Strategies and Oxford Econmetrics, using 20 years of Midtown office data, Midtown Employment statistics and Greater London Gross Added Value Statistics. There are often very high but isolated transactions in any given quarter, such as the £90 paid by Wadhwani for 5,832 sq ft at Orion House in the 4th Quarter 2015. Farebrother believe that the current prime rental level in Midtown sits at circa £70 per sq ft. Their analysis, which plots the performance of the market until 2020, shows prime rents will rise to £77 per sq ft, returning to approximately the same prime rental levels of today by the end of their forecasting period in 2020. The model also shows a significant easing of Midtown’s supply squeeze, with the market likely to return to the long-term average of a 6% vacancy rate from the current historic low level of 2.9%. Midtown’s development pipeline, which currently stands at 1.8 million sq ft, is expected to remain consistent with levels of construction anticipated to fall in tandem with a rise in Availability Rate post 2020. Malcolm Brackley, Partner at Farebrother, said: “This is the first detailed forecast that has been produced for Midtown. “Midtown has matured as a market for both occupiers and investors and the need for detailed analysis is greater than ever before. Investors and developers are increasingly keen to understand the effects of macro-economic trends on one of London’s most dynamic sub markets as well as the impact of a number of transformative events, most notably the arrival of Crossrail.”