There are not many property lawyers who haven’t been past St Mary’s Axe in the past week or so, skipping merrily along with their clients as interest on the sale of the Gherkin gathers pace.
Swiss Re, with Linklaters on its side, is hoping for a sale topping £600m. But what The Lawyer was interested to glance over was the building’s rents. The Gherkin is of course home to several law firms, with Kirkland & Ellis occupying the most space from the legal fraternity. Hunton & Williams and Mayer Brown Rowe & Maw also have areas, along with Newcastle’s Watson Burton.
The Gherkin makes a total rental income of £26.9m a year. Some unnamed tenants are paying rent as low as £41 per square foot,
but the building average is £52.90. Swiss Re, the building’s largest tenant, has just renewed its lease at £55 per sq ft, rising to £60 in October 2008. Surely other tenants will be prompted to follow suit.
Taking the average, Kirkland’s rent is currently £2.58m, Hunton’s is £903,000, Mayer Brown’s is £566,000 and Watson Burton’s some £16,000. A rise to £60 per sq ft will hurt – Kirkland’s rent would top £3m, while Hunton would pay more than £1m.