EG LONDON


the last word The South Bank show


TOM PILKINGTON HEAD OF LONDON OFFICES EGi


Comparisons can be drawn between the South Bank and Midtown. They both offer excellent access to the City and West End; they both offer rents at discounted rates to the City and West End; they are both seeing significant development – King’s Cross Central to the north of Midtown, and Sellar’s schemes on the South Bank as well as the redevelopment of Sea Containers House, the Shell Centre and Elizabeth House, should the latter two ever get under way (see p71). But behind the similarities, there are


some significant differences. For example, the Midtown stock figure is almost twice as high as that of the South


DOMINANT SECTOR BY TAKE-UP BY MARKET 42%


OF TOTAL Take-up CENTRAL &


LOCAL GOV’T


Bank (32m sq ft compared to 17m sq ft). According to EGi Research data, South Bank availability rates have tracked 2%-3% below Midtown rates – at least until the completion of the Shard. In terms of take-up, both markets have


seen peaks and troughs, with highs appearing to switch between the markets until 2008. However, since then, there has been a smoothing out, with the South Bank achieving around 80,000 sq ft per quarter and Midtown averaging around 360,000 sq ft per quarter. EGi’s consensus rents panel (based on


the average of estimates from a panel of commentators asked to estimate rental values for a hypothetical 20,000 sq ft grade-A unit) puts rents on the South Bank significantly lower than in Midtown (£54.50 per sq ft with 23 months rent- free on Chancery Lane, compared with £46.50 per sq ft with 22 months rent-free


at More London), so with all this in mind, why is the South Bank lagging behind in terms of take-up? The key difference appears to be


Midtown’s ability to attract occupiers from certain sectors. Since 2005, the South Bank has seen government, transport, professional and the TMT sector account for the most take-up in any given year; while in Midtown take-up was dominated by the professional sector (which includes legal) between 2005 and 2007, and then TMT from 2008 to the present, with a blip in 2010 for the financial sector. While this ability to attract and retain a


sector has been a strength for Midtown in the past, firms are increasingly footloose, and attracted to low rents (assuming a good product). It will be interesting to see if this diversity of occupier, alongside an increasing range of stock, begins to work in the favour of the South Bank.


TRANSPORT 31%


PROFESSIONAL 29%


29% OTHER


23% TMT


OF TOTAL Take-up PROFESSIONAL


40% 2005


31% TMT


PROFESSIONAL 25%


43% TMT


30% TMT


PROFESSIONAL 33% 2006 Source: EGi Research’s London Offices


PROFESSIONAL 26% 2007


26% TMT 2008


23% TMT 2009


FINANCIAL 2010


18%


31% TMT 2011


34% TMT 2012


86% TMT


11 May 2013


www.estatesgazette.com


85


MIDTOWN


SOUTH BANK


2013 (Q1)


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