There has been plenty of talk in recent weeks about the “Central Saint Giles effect”.
The developers at the Olympics zone will no doubt be looking on a little enviously at the success of the Legal & General, Stanhope and Misubishi Estate scheme, but also trying to see what they can learn as they try to bring forward developments that have a similar impact.
Confirmation yesterday that Google has taken 160,000 sq ft of office space at the development has cemented a feeling that the scheme is changing perceptions about London’s Midtown area.
The internet giant is thought to have paid £65 per sq ft – markedly up on the £55 per sq ft average prime rent that CoStar is currently reporting for the area.
The price is a reflection of significant interest from other media groups such as Sony in the now fully let Renzo Piano-designed building, as well as Google’s desire to secure a break clause for 2016 ahead of an expected consolidation by the company into a giant headquarters in the capital, potentially at King’s Cross Central, maybe in White City, maybe in Hackney Wick …
What is clear is L&G, Stanhope and Mitsubishi’s bold development has proved a lucrative hit with the media sector at a difficult time economically and it is helping to propel interest in the Midtown area.
Yesterday the Farebrother IPD Midtown Investment Report reported that rents saw an increase of 7.1% over 2010, outperforming both City and West End offices, at 6.6% and 5.2% respectively, and well above the all UK office average of 1.5%.
CoStar’s latest research suggests the good news is continuing into the first half of this year, and then Google moved to Central Saint Giles …
I am told that investors are falling over themselves for the limited opportunities to buy around the Crossrail development sites at Tottenham Court Road and Farringdon, and Central Saint Giles has arisen in some respects as the totemic anchor between the two areas.
Its success seems obvious with the benefit of hindsight, offering media friendly new space close to the traditional media homes of Soho and Covent Garden.
But rewind to when L&G was seeking funding for the project and I am told Mitsubishi had few rivals. The development has had its fair share of detractors design-wise too, but it clearly appeals to the occupiers it wants to attract.
So what is the Olympics connection?
Well, it’s proof again, if any was needed, that Stratford’s new developments can alter perceptions and attract new occupiers and businesses if the right schemes are thought up now.