High-end London offices still in demand despite hybrid working

Companies have been snapping up new high-end office space at record levels, according to the boss of Landsec, as the great return to the office continues.


The company reported leasing deals for central London office worth £63 million in the year to 31 March at average let prices 4% higher than valuers had predicted.


Overall, Landsec’s offices are now 95.3% full, the company said.


Mark Allan, chief executive of Landsec, said: “People’s use of the office has changed and people are taking advantage of remote working.”


But the so-called “war for talent” was ensuring that high-end office space remained in demand.


He said employers wanted to be “offering the right quality of space so people can come in and collaborate and do things they can’t do from home”.


Companies are keen to sign up for flexible space that can be used for different things, he added, leading to polarisation in the market where lower quality space was still suffering.


Landsec also reported an improving picture for its retail assets, with occupancy up to 93.2%.


Plans to encourage shoppers back into stores, such as charging for online returns, were increasing footfall, Allen said.


Landsec increased its stake in the Bluewater shopping centre by a further 18.75% during the year and ploughed £426 million into acquiring part of Media City in Salford, where it plans further redevelopment.


Its net assets per share, which indicates the underlying value of the business, rose from 975p to £10.70 during the year.


Elsewhere in the sector, West End landlord Shaftesbury has bought the lower floors of 92-104 Berwick Street in Soho for £27.5 million.


The space is currently mostly vacant, but Shaftesbury said it felt confident about letting the space given the popularity of the area and the upcoming boost from the new Elizabeth line.


Evening Standard (Rhiannon Curry) - https://www.standard.co.uk/business/london-offices-landsec-leasing-property-hybrid-wfh-b1000455.html

Photo by Benjamin Davies on Unsplash

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