Canary Wharf Office Rent Is Fastest Growing In London

London has been dubbed the third most expensive city to rent office space in the world; with Hong Kong and New York taking the top spots. However, with rent yields high, Canary Wharf office rent is set to grow significantly, as seen by a recent report by Knight Frank.

Canary Wharf has around 14,000,000 square feet of office and retail space. In 2014, Canary Wharf's statistics had shown the working population to have reached around 105,000 and is home to a number of world and European headquarters, including banks, media organisations and professional services.

So, why is Canary Wharf office rent expected to grow in 2016?

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Sheikh Adbdullah bin Mohammed al-Thani, the chief executive of Qatar’s sovereign wealth fund that controls Canary Wharf, has promised to build more offices and homes in the area, boosting its reputation and attraction to move, for both business and pleasure. 2,000 new builds for residential use is expected to be built within one mile of the new Crossrail station, attracting businesses and a number of business men and women to the area.

Canary Wharf office rent is expected to see a growth of 12.8%, followed by Shoreditch at 10% and Midtown at 9.6%. Offices have a current shortage in the capital and yet affordability is a catalyst for rents to increase. However, despite relatively high rental incomes for Canary Wharf’s business hub, it will connect to Central London’s Tottenham Court Road in 11 minutes, compared to 21 minutes which is the current journey time.

The development of Crossrail will in hand make offices more accessible and worth the spend. Bruce Dear, head of London real estate at law firm Eversheds, comments:

“Crossrail will make Canary sing. Pay £40 per square foot and be just 18 from Mayfair, or pay £100 per square foot extra to be two minutes from Mayfair? The Wharf will be the new West End.”

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Not only is Canary Wharf office rent set to become London’s fastest and strongest growth district, it is attracting technology and creative firms as they are continually growing and expanding; seeking larger and classy offices.

Shoreditch is to expect an increase of 10% and the increase for office space will come down to the technology sector. Shoreditch has become a British rivalry to California’s ‘Silicon Valley’ and is set to continue to flourish. Demand for office space, and a space of their own was particularly seen by the technology sector; who remain the largest sector demanding office space for the fifth year coming. Rents in Shoreditch grew by a shocking 24% in 2015, nearly double the increase seen by the financial district next door.

Dan Gaunt, Head of City Leasing, has commented:

“The gap between rents in traditional core areas and other sub-markets has never been so small. Occupiers are making decisions based on quality of product and amenity, availability of scale, adjacency of workforce and not by postcode.”

Rents in Shoreditch at the end of 2015 stood at £65.00 per square foot.