New reports have shown Simon Morris that a major London property development in the central district of the city has recently secured one of the most successful businesses in the world as a tenant.
Major property hotspot
The central district of London is arguably one of the most lucrative property markets in the UK, if not the world. Areas within central London, such as Tottenham Court Road, benefit from the district’s prominence as the base of the city’s thriving economy. City AM reported in July 2015 that 79% of surveyors polled by the Royal Institution of Chartered Surveyors, have seen the price of office property in the area go up due to a fall in supply.
A range of London property developers have rushed to bolster the supply of office space in central London, in order to meet unflagging demand. One such project is the Rathbone Square development, located near the Tottenham Court Road tube station. Experts predict that this area is set to see property prices rise in the near future, due to the Crossrail effect.
Rathbone Square, a project currently being constructed by London property developer Great Portland Estates, will be completed in 2017. Comprising 2.3 acres between Rathbone Place W1 and Newman Street W1, Rathbone Square will feature “high quality offices and retail space and 162 residential apartments totalling approximately 412,000 square feet overall.”
According to International Property Magazine, Rathbone Square recently acquired a major new tenant in Facebook. The global tech firm has leased the entire development from Great Portland Estates, at an initial rent of £16.9 million (although the first 30 months will be free), on a 15 year term.
As part of the agreement, Facebook has also secured rights of first offer on the surrounding office space, including developments on 76 Oxford Street and 1 Dean Street. The portfolio director at Great Portland Estates, Neil Thompson, commented on the deal. He said that “we are delighted to welcome Facebook into the Great Portland Estates portfolio and we look forward to providing them with a world class London headquarters in this outstanding development.”
Return on investment
This deal indicates that central London property developments can still expect to earn significant return on investment. Central London’s importance as a global business hub makes office and residential space in the area highly desirable. With supply so low, new developments will continue to be welcomed by companies such as Facebook, who want to base their operations in central London.