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Eversheds comment: No time to build speculative office space in Central London

  • United Kingdom

    11-11-2014

    Commenting on the sale of The Gherkin and office space in the UK’s capital being built at the fastest rate in a decade Bruce Dear, partner and head of London real estate at law firm Eversheds, says:

    “Are the City’s Towers becoming a new West End in the Sky? The Gherkin has changed jars for a 3.8% yield - almost 1.2% below average City office yields for Q1 2007 – the last boom’s height. Either we’re living in a new paradigm where City Towers become the eyrie’s of global businesses happy with reviewed rents of £70 p.s.f., or this pickle is overpriced.

    “Occupier demand is recovering with the economy, and the City is short of high spec. space. However, developers beware! This is no time to build spec.if you can pre-let to an excellent potential occupier, then get building. If not, I’d wait for the next early development cycle.”

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