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Despite Brexit, London skyscrapers draw highest rents in Europe

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Despite Brexit, London skyscrapers draw highest rents in Europe

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By Esha Vaish (Reuters) – Rents for office space in London skyscrapers are still the highest across Europe, a report showed on Thursday, indicating that the capital remains one of the most sought after business hubs despite Britain’s looming exit from the European Union. Prime rents in London buildings over 30 storeys stood at $110 per square feet over the first half of the year, nearly double the $58 per square feet and $54 per square feet rent for buildings in Paris and Frankfurt respectively, according to the report by property group Knight Frank. London’s future as Europe’s premier financial hub has been threatened by Brexit as many companies have said they may move some jobs out of the British capital if the country loses its access to Europe’s single market and are already drawing up plans. However so far the amount of office space take-up, including across the City of London and Canary Wharf financial districts, has been steady over the past year, prompting overseas groups to buy the British capital’s best-known skyscrapers including the “Cheesegrater” and “Walkie Talkie”. “That London still commands the highest skyscraper office rents in Europe, despite the Brexit uncertainty, is a statement of its resilience and popularity as a business location,” Knight Frank Chief Economist James Roberts said. “Firms are willing to pay more to be in London skyscrapers than those in Frankfurt because they view the UK capital as a more important international hub,” he added. A Reuters survey has shown that around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the country leaves the single EU market, with Frankfurt by far the most popular destination for new roles and Paris in second spot. Knight Frank’s report showed that rental growth for Frankfurt and Paris skyscraper offices was flat in the six months period, indicating that office values in financial cities expected to benefit from Brexit had seen a limited boost so far. Growth in London rents, which are the fifth highest in the world behind cities such as Hong Kong and New York, was also flat over the period.

(Reporting by Esha Vaish in Bengaluru)
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