Prices Fall for Commercial Property in Central London
Office space across
Already a noticeable rise in office letting is being witnessed, with tenants no longer shying away from property deals involving office space as they had started to do with the onset of recession. This welcome change is likely to re-energise the economy.
UK property rental companies suffered huge pre-tax losses when their capital values took a nosedive due to the economic recession. This led the companies to offer office space at reduced prices. Their frantic bid to salvage the market seems to be working, as customers are again showing interest in deals.
An NB Real Estate research confirmed this fact when it concluded that office letting has increased from 923,000 square feet to 1.8m square feet during the first quarter of this year. However, it must be noted that vacancies have significantly increased in the city. The West End area alone has seen a rise in vacancies from 7.4pc to 8.4pc and in the city, they have reached approximately 11.3pc.
However, the new vacancies are not causing much ripple in industry circles. Accountancy firm BDO Stoy Hayward has reported that investor returns are getting better. They have risen from -5.27pc at the beginning of 2009 to -.9pc currently. As far as investor interest is considered, then the present level will stand as the highest in commercial property across Britain in the last one year.
It is believed that with more firms looking towards office relocation and office fitout plans and more companies approaching Landlords for commercial property the vacancies might soon start falling, giving a boost to the prices.
