Ruskin Square and the capital’s third Westfield are the game changers which could push up office rents in Croydon, according to an expert on the Croydon market.
Vanessa Clark of Sinclair Clark believes attracting more London-based occupiers to the town is key to whether predictions of a near 40 per cent increase in top rents over the next two years is achieved.
Findings from Savills, published in Estates Gazette, predict a near 40 per cent increase in top rents over the next two years, compared with a general five per cent around other prime office locations.
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An image of Stanhope and Schroders’ Ruskin Square development
It predicts the rises will take Croydon past the likes of Guildford, Reading and Staines over a period in which top rents in the likes of Chiswick, Hammersmith and Richmond will remain relatively stable.
Vanessa said: “Croydon has historically operated from a low rental platform, this in part explains why new development, apart from the recent delivery of Renaissance, which achieved £23.50 per sq ft, against a value engineered delivery, has not been seen.
“To deliver Grade A specified offices, rental levels need to reach above £30psf. Anything less and the viability of any scheme will be called into doubt.
High hopes: Vanessa Clark of Sinclair Clark
“The highest rent achieved recently is believed to be £25psf at Interchange in the latest letting to Superdrug, but this is yet to be confirmed.”
Vanessa sees the new Grade A office space being built speculatively next to East Croydon station as the location which will break through the current rental ceilings.
All hopes are pinned on Ruskin Square where quoting rents are £35psf but tantalizingly yet to be achieved,” she added.
“Stanhope is the joint venture partner together with Schroders. Stanhope offers the hope of repeating their Chiswick success in creating a rental oasis where rents increased from a similar base to Croydon and now sit above £40psf.
Feather in the cap of Croydon: Westfield and Hammerson’s new retail centre
“Stanhope has a significant track record and brings with it a sophisticated marketing machine. If anywhere can achieve the higher rents predicted it will be Ruskin Square.
“Whilst indigenous occupiers will almost certainly continue to resist much higher rental levels, the most likely outcome is, that together with Ruskin Square, the keenly awaited retail delivery from the Croydon Partnership will encourage more London based occupiers used to paying higher overall outgoings to be won over to the already exceptional infrastructure offered by the town.
“The Ruskin Square and Westfield Croydon schemes are distinctive game changers and a feather in the cap of Croydon.”
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