London's tallest office buildings still command sky-high rents post-Brexit vote

Helen Cahill
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The Shard Building Nears Completion
Brexit hasn't hit London's skyscrapers yet (Source: Getty)

Fears have been mounting about the future of commercial property after the nation voted to leave the EU, but London's skyscrapers remain some of the most expensive office space in the world.

London skyscrapers still command the fourth highest rental value in the world, beaten only by Hong Kong, New York and Tokyo, according to data from Knight Frank.

Annual rent in London's tallest building is now at £87 per sq foot. In Hong Kong - the city with the world's most expensive skyscrapers - rent for a year costs £211 per sq ft.

However, London could yet be overtaken. There has been no rental growth in the capital's skyscrapers in the six months to June. Annual rent for a skyscraper in sunny San Francisco costs £86 per sq ft, but rental growth in the same period was 2.7 per cent.

Read more: Fears about UK commercial property are overblown. Here's why.

Rents in Shanghai skyscrapers are shooting up at the fastest rate, growing 7.7 per cent in the period. Sydney takes second place, with a growth rate of 6.5 per cent.

In Singapore, the world's eighth most expensive city for renting office space in skyscrapers, rents have tumbled seven per cent in the first half of the year.

William Beardmore-Gray, head of consultancy and occupiers at Knight Frank, said: "We have seen strong rental growth in London's skyscrapers over the past two years, and rents remain resilient in spite of the economic uncertainty arising from the European referendum result.

"Demand for space in London's skyscrapers is undiminished with a number of deals done already in the second half of the year at very good levels."

Read more: The tallest residential skyscraper in Western Europe is coming to London

Immediately following the Brexit vote, investors scrambled to take their cash out of commercial property funds, forcing several to suspend trading.

Canada Life re-opened its property fund earlier this month, saying that UK commercial property had shown "some stabilisation" and that it could re-open its doors following the sale of two properties in August.

However, the firm admitted that its property valuations may be inaccurate, as it is still not known how Brexit will play out and the market outlook remains unclear.

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