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Palace sets record office rent in York with Hudson Quarter pre-let
Palace Capital (LSE: PCA) the Main Market listed REIT that has a diversified portfolio of UK commercial real estate in selected locations outside London, announces that it has set a record office rent in York City with the completion of a pre-let agreement with solicitors firm Knights LLP (“Knights”), part of Knights plc, at its flagship Hudson Quarter mixed-use development. It marks the first commercial agreement at Hudson Quarter, which is due to complete in the first quarter of 2021 and where 30% of the residential units are already sold or under offer.
Knights is taking 4,588 sq ft of ground floor office space on a 10 year lease at £12.50 per sq ft for the first two years, after which point the rent will rise to £25.00 per sq ft, marking a record office rent for the City of York, with an upward only rent review at five years.
Until the completion of Hudson Quarter, Palace is accommodating Knights at its newly refurbished office space at nearby Museum Street where they have taken occupation of 3,100 sq ft and where it has signed a two year lease, also at £25 per sq ft, with a break option after one year.
Hudson Quarter, which is located within the walls of the City of York, will eventually comprise four separate buildings. A total of 127 apartments will be delivered in three of the blocks, which will be named Victoria, Waverley and Kings, in a nod to York’s railway heritage. The offices being let to Knights comprises all of the commercial space available in the Victoria building. Waverley and Kings will be entirely residential, while the fourth building, to be known as HQ, will provide a further c.35,000 sq ft of grade A office space.
Commenting on the letting, Neil Sinclair Chief Executive of Palace Capital plc said: “To have completed our first commercial pre-let a full year ahead of Hudson Quarter’s completion and at the same time setting a new rental tone for York is very pleasing. Moreover, our ability to secure this lease while accommodating Knights at our other asset in the City of York in the interim is testimony to our asset management skills and ability to manage occupier needs across our portfolio.
“This is the first time in more than 10 years that new, grade A speculative office space is being offered into the York market, where supply is very tight alongside growing demand, and we are seeing strong appetite for the remainder of the office space we have on offer.”