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LONDON-London’s South Bank should no longer be seen as a fringe office location, according to agent DTZ Debenham Tie Leung. In new research, the firm argues that the district–running from Westminster Bridge in the west to Tower Bridge in the east–now has the transport infrastructure and quality of corporate occupier for it to be considered a core London office location alongside the West End, the City, Midtown and Docklands.

The market has just under 17 million sf of office space, less than Midtown’s 23 million sf but more than Docklands’ 11.6 million sf. Prime rents now stand at £42.50 ($61) per sf, up 20% over the past 12 months although most of this growth occurred in the second half of 2000. Over the same period City rents grew 14% to £62.50 ($90) per sf and in Docklands they rose by 18% to £44 ($63) per sf.

And despite the global economic downturn the market is still performing well. By the end of August 2001 take-up was already up 66% on the total for the whole of 2000. But William Jackson, Development Director at DTZ said the market has been held back by the lack of speculative new development, which is needed to improve the quality of the office stock.

‘Whether we shall see new speculative development starts over the next 24 months is questionable in view of the current global and economic situation,’ said Jackson. ‘But those who commit to new quality large footprint buildings with rental expectations of circa £40 ($57) per sf can expect to reap the benefits.’

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