Commercial real estate investment trust, Palace Captial, has announced that it has achieved a record office rent in York’s Hudson Quarter, following a pre-let agreement with solicitors Knights LLP.
The deal marked the first commercial agreement at the mixed-use Hudson Quarter, which is still in development and expected to complete in the first quarter of 2021.
Despite the completion date of Palace Capital’s flagship development still, some way off, 30% of the residential units have already been sold or are under offer.
Until Palace’s Hudson Quarter site is complete, the firm will be accommodating Knights in its newly refurbished office space at Museum Street.
Following the completion of the site, Knights will take 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, with the rent rising to a record-breaking £25 per sq ft after that period.
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 ten 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.”
Once Hudson Quarter is complete, it will comprise of four separate buildings, including two solely for residential use, one for mixed-use and another for Grade A office space.
Palace Captial is a UK REIT that currently has a £275.8 million diversified portfolio of property across the UK.