Conventional office lease rates up 12% in City of London
Figures from property agent NB Real Estate show that rates for conventional office leases in the City of London rose by 12% in the last quarter of 2009.
Other areas of London also showed positive upturns, including Canary Wharf and the West End.
This return to growth marks the end of a difficult period which lasted over two years, and reportedly represents the largest rise in rental values since 1988.
“This is a phenomenal recovery in rents in such a short space of time,” says James Gillett, director of city offices at NB Real Estate, speaking to the Telegraph.
He added: “It is not normal to see rents jump so dramatically but there has been little that has been normal about the commercial property market or the City of London over the last two years.”
Following a widespread decline in new property developments during the recession, there is now a shortage of available space in the City which developers and investors are looking to capitalise on.
One example is the Walkie Talkie tower, an office skyscraper in the City of London. Work was suspended on the tower in 2008, but has now been restarted in response to cheaper construction costs and a shortage of office space in the City.
In the serviced office industry, there are many new properties coming to the market on a regular basis. Examples include the recent launch of a new business centre in Soho and, outside of the UK, Regus has recently opened 11 new centres in France – bringing their presence there to 50.