BNP Paribas Real Estate unveils new City office as it sublets former HQ space

James Strevens (left) & James Carrington (right)

BNP Paribas Real Estate, part of the BNP Paribas Group, a global leader in financial services, has announced that is has successfully sublet two floors of its former UK headquarters at 5 Aldermanbury Square (EC2) and moved its City facing teams to a newly fitted out space on the top floor of the same building. This follows the firm’s strategic move to the Group’s Marylebone Campus in January to maximise its unrivalled point of differentiation.

BNP Paribas Real Estate has sublet almost 30,000 sq ft of fully fitted office space across the 2nd and 3rd floors at 5 Aldermanbury Square to the finance-focused big data firm, TradingHub Group Ltd, and telecoms software provider RingCentral respectively. The subleases will run to January 2027 followed by a reversionary lease for seven years in the case of the 2nd floor, with a tenant break in the second year.

James Strevens, head of City leasing at BNP Paribas Real Estate commented: “These lettings affirm the rising demand for quality fitted space across Central London. With supply tight and fitout costs rising, we’re seeing increased demand for high quality “plug and play” spaces, particularly within prime City locations, attracting occupiers from all submarkets.”

BNP Paribas Real Estate’s City facing teams have relocated to a stunning Grade A space on the 18th floor of 5 Aldermanbury Square which boasts outstanding views across London’s impressive skyline.

On the firm’s new City office, Strevens commented: “Our City leasing team brings an impressive blend of experience and energy which is rooted in our deep understanding of the evolving market trends and occupier demands.

“Our approach is characterised by a hands-on, proactive methodology, ensuring that each aspect of a leasing and marketing strategy is executed with precision and aligned with the overall objectives for each asset. With a track record of successful mandates and a deep understanding of London’s unique property landscape, we deliver results that exceed our clients’ expectations. We are excited to build on this track record from our fantastic new office with panoramic views over the market we’ve been specialising in across varying real estate cycles.”

“2024 is a pivotal year for the City office market. The recovery is here, and the tide is turning. The momentum that we experienced during the final months of 2023 has continued into H1 and demand for high quality amenity-rich offices continues to grow. Prime rents now command record highs of £77.50 per square foot, with best-in-class assets exceeding £100 per square foot. We believe that prime rents will continue to climb through to 2026 as yields continue to come down during the second half of this year.”

James Carrington, head of City investment at BNP Paribas Real Estate, concluded: “To compliment James’s sentiments, we’re seeing some positive signs on the investment side as we reach the bottom of the market and move towards a new cycle, providing the opportunity for future yield compression combined with strong rental growth prospects, driving performance. This has resulted in recent investor activity across the Central London markets.

“Our forecast data found that City prime offices are anticipated to deliver total income returns of up to 11% per annum over the next five years, which reflects the correction in prime yields creating a desirable investment entry point, both for core and value add product. For many investors, 2024 will be seen as an opportunistic time to deploy.”

Recent analysis from BNP Paribas Real Estate indicated the start of the commercial real estate recovery and a new investment cycle with investment volume in London recording two consecutive quarterly increases. Despite both quarters still being below the long-term average, the final quarter of 2023 saw investment volume in the capital city surge 23% to £1.5bn and Q1 2024 revealed another jump in the region of £2.5bn.