Cluttons - General - London SE1, South Bank Report

Date: 23 Jan 2001

Available office space on the South Bank continues to fall and currently stands at 17,302 sq m (186,238 sq ft) according to the latest research from Cluttons.

According to the agents’ South Bank Update research report, some 13,000 sq m (139,932 sq ft) of new space was completed in the last four months, but the total area under construction has remained at around 38,000 sq m (409,032 sq ft). But, Cluttons predicts the amount of space under construction is set to soar.

There is currently over 528,000 sq m (5,683,392 sq ft) of office developments in the pipeline - of which approximately 370,000 sq m (3,982,680 sq ft) has planning consent.

The South Bank development pipeline has experienced a few setbacks in recent months. Frogmore Estate's planned 50,000 sq m (538,200 sq ft) development of One Westminster Bridge has been rejected by Lambeth Council (although the decision has been appealed and Frogmore have submitted a further planning application) and MORI's recent decision to take a 15 year lease on Diary House has halted the planned 4,500 sq m refurbishment of the property.

Nonetheless, the imminent development of New London Bridge and Land Securities planned redevelopment of St Christopher's House (78,965 sq m/849,979 sq ft)), as well as numerous other schemes, means that the area of office space under construction is set to soar.

Commenting on the research findings, Cluttons’ Head of Research Neil Chegwidden said:
“Office availability levels on the South Bank have fallen by over 75% since we began producing the South Bank Update just eight months ago. This is a trend that has been experienced across much of the central London office market. The level of office space under construction however, has not fluctuated as dramatically. Despite 45,120 sq m (485,671 sq ft) of offices being completed in the past eight months, the area under construction has fallen only slightly.

“Recently announced plans to begin developing the Jubilee Gardens site (adjacent to the Millennium Eye) in 2002, together with a £240,000 pledge from Lambeth to improve Waterloo station and its environs for both pedestrians and cyclists, illustrate the continuing gentrification that the South Bank is experiencing. And, while redevelopments have so far tended to focus on the riverside, it is evident that they are beginning to spread, a trend exemplified by the 68.8ha (170 acres) mixed-use scheme proposed for Elephant & Castle.

“With the possible construction of new large office properties on the South Bank, will come new occupiers. Will they be existing SE1 occupiers, who want larger, better quality accommodation, as is likely to be the case for J Sainsbury’s and Ernst & Young, or will they be new companies moving into the area?”.

“The low levels of availability both here and in other core markets, as well as rising rental levels will undoubtedly have an impact on who occupies this space.”

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