By Daniel Hunter
It’s taken nearly 12 years for the tallest building in Western Europe to become reality, but at the foot of the Shard, London’s safe haven status for investors fleeing political unrest abroad has driven nearby offices on the South Bank to double-digit numbers.
Since 2000, when plans for the Shard were unveiled, the South Bank market has matured considerably — becoming an area of prime investment in London to rival the City, Midtown or West End markets. Returns reached 12.8 percent last year, according to IPD (formerly Investment Property Databank) the global real estate analysts. This made South Bank offices the second highest performing area of property in the UK last year, as wealthy foreigners continued to use the capital’s prime real estate as their collective piggy bank.
Whether the weight of international money will continue to push investors south of the River remains to be seen: it will be depend on wider economic factors. But the South Bank has established itself as a prime central London area — bounded by rail, river and residential on all sides — making it one of the most accessible and desirable areas for office development in London.
Greg Mansell, Senior Research Manager at IPD said, “Investors are still shying away from peripheral office markets but the investment performance of South Bank, particularly London Bridge, Southwark and Waterloo, is highly comparable to Central London. High profile developments such as The Shard will continue to solidify South Bank’s status as a core London market.
“Occupiers view the South Bank as a cheaper alternative to central London and despite obvious comparisons to the City occupier market, the rent differential between the West End and South Bank makes for an attractive case for occupiers, particularly TMT firms, to look to the South for value whilst avoiding stigma of moving to a fringe location.”
Join us on