Area on way to achieving rental highs of 2007.  Clerkenwell reached a rental zenith four years ago when DSA Engineering paid £45/sq ft for 3,500 sq ft at 77-79 Farringdon Road. It seemed that the area had come of age.

Funds and property companies bought from private owners, but then rents started to slide back to the mid-£30s/sq ft when the downturn began. It is time to test the traditional Clerkenwell market again. Earlier this week, LaSalle Investment Management achieved practical completion on 2 Pear Tree Court, a refurbished warehouse just off Farringdon Road, north of Clerkenwell Road.

LaSalle’s agent, Ashley Goodman, a director at Richard Susskind & Co, says the 14,025 sq ft building will be leased to a single tenant. “There has been a lot of interest from fashion, media and advertising companies relocating from the West End,” he says. “We’re talking to several parties, and they all want to take the whole building,” he says.

Shaun Simons, director of City fringe agency Hatton Real Estate, is similarly bullish. “Clerkenwell will achieve the mid-£30s/sq ft and, when Crossrail arrives at Farringdon in 2017, it could be £50/sq ft,” he says. The next office building to transform the area will be 85 Clerkenwell Road, where refurbishment will begin before the end of the year.

Jonathan Fletcher, a director of Endurance Land, which owns the building with GE Real Estate, says the tenants will leave this year. Fletcher says the 30,000 sq ft refurbishment may attract a single tenant, but no rents have been quoted. It could also be multi-let. Endurance and GE Real Estate bought the converted 19th-century tobacco warehouse in January 2007 from a private seller for £11.45m, which reflected an initial yield of 3%.

Fletcher recalls that the yield was so low because the building was 80% occupied. The tenants paid between £10/sq ft and £20/sq ft. The funds bought in Clerkenwell in the belief that it could offer institutional-grade property. Their faith could be rewarded.