Back to the office helps Canada’s tallest tower to full capacity
The City’s tallest tower, 22 Bishopsgate, has been fully let after four years as the financial district continues to prove its ability to command premiums for best-in-class sustainable spaces.
There’s little sign of the gloom pervading other areas of the commercial office sector in the City, with rents at 22 Bishopsgate the highest ever achieved in the City, according to property agency Savills.
The news comes as firms increasingly order staff back to the office, with ad giant WPP the latest to do so, causing uproar amongst its staff.
The building, a 62-storey tower between Bank and Liverpool Street stations, has now agreed rental deals across its 1.2m sq ft of office space.
Its top floor has been leased at £122 per sq ft by Brazilian bank Banco Master, according to The Times.
That compares to an average rent per sq ft in the City of £75 – £87.50 for Grade A spaces, according to office design firm Oktra.
In February, Gordon Ramsay will start work on opening five restaurants in the building, set to be the highest in the capital.
Other tenants in the building include Hiscox and RSA, law firms Cooley and Skadden, as well as Tata Consultancy Services and Nasdaq, according to The Times.
Phillip Shalless, Senior Asset Manager at AXA IM Alts, has previously said that leasing momentum at 22 Bishopsgate has been driven by “high occupier demand for, and lack of supply of, strategically located, amenity-rich office space.”
Offices where people want to work
The demand for high-class office space is a culmination of a few trends in the commercial real estate sector.
The first is that companies are increasingly looking for sustainable spaces as they try and meet their own environmental targets and simultaneously avoid falling foul of new regulation which requires all office spaces to have a minimum EPC rating of C.
The changes to minimum energy efficiency standards (MEES), which will come into force in 2027 and cause half of all offices in the capital to become ‘unlettable’, has driven a flight-to-quality in the City and a flurry of retrofits.
This shift has contributed to rising rents for high-quality, sustainable space.
Secondly, companies are actively trying to entice their workers back to the office amid fears of productivity losses from WFH policies. Ad giant WPP became the latest company to attempt to bring workers back to the office four days a week, although the policy has caused mass discontent amongst its employees as they fight to keep the option to work from home.
After WPP wrote to its staff telling them to get back to the office four days a week, they were confronted with a furious backlash from employees and found themselves the centre of a WFH debate. 15,000 people signed a petition protesting the move in just a week.
This morning, the former boss of Marks & Spencer and Asda, Lord Rose, said people working at home was “not doing proper work.”
The divide has become between business leaders, who – like Lord Rose – believe that working from home encourages low productivity, and employees who value the flexibility and ease of working from home.