Login to UKBP
Commercial Property News
King Sturge issues 2010 commercial property predictions
King Sturge sees the London commercial property market improving, but says the situation will not be the same elsewhere in the country.
London office rents will increase this year, property consultancy King Sturge has forecast.
The firm said in its Property Predictions 2010 report that it expects the price of renting commercial buildings in the capital to climb in the coming months, with the City seeing a 10.5% rise, taking values to £47.50 per square foot by the end of the year.
In the West End, rents will jump to £70 per square foot - a 7.6% rise - as “boutique” financial organisations begin to return to grade A office space. And Canary Wharf will “see a surge of major transactions” as the year progresses, meaning vacancies will fall back to single figures by the end of 2010.
However, the situation is not so positive elsewhere in the country, as King Sturge also predicted that the divide between the capital and the UK's other major cities will continue to widen.
London will be the only market where prime rents will grow in 2010, it said, with other regions to take longer to return to growth, even though declines this year will be less steep than they were in 2009.
The main factor affecting the rebound of the market outside of the capital is set to be limited demand, with the squeeze on public sector funding set to limit the take-up of offices.
It noted that Manchester and Bristol are the best-placed centres for recovery, with central government relocations potentially helping to limit the impact a reduction in public funding has on the commercial property market.
Newsweek recently argued that although the economic downturn has hampered the real estate market in London, holding commercial property as an asset there still has its advantages.
It quoted Douglas McWilliams of the centre for economics and business research as saying that the “vast majority” of major businesses still have a need to operate out of the capital.
London office rents will increase this year, property consultancy King Sturge has forecast.
The firm said in its Property Predictions 2010 report that it expects the price of renting commercial buildings in the capital to climb in the coming months, with the City seeing a 10.5% rise, taking values to £47.50 per square foot by the end of the year.
In the West End, rents will jump to £70 per square foot - a 7.6% rise - as “boutique” financial organisations begin to return to grade A office space. And Canary Wharf will “see a surge of major transactions” as the year progresses, meaning vacancies will fall back to single figures by the end of 2010.
However, the situation is not so positive elsewhere in the country, as King Sturge also predicted that the divide between the capital and the UK's other major cities will continue to widen.
London will be the only market where prime rents will grow in 2010, it said, with other regions to take longer to return to growth, even though declines this year will be less steep than they were in 2009.
The main factor affecting the rebound of the market outside of the capital is set to be limited demand, with the squeeze on public sector funding set to limit the take-up of offices.
It noted that Manchester and Bristol are the best-placed centres for recovery, with central government relocations potentially helping to limit the impact a reduction in public funding has on the commercial property market.
Newsweek recently argued that although the economic downturn has hampered the real estate market in London, holding commercial property as an asset there still has its advantages.
It quoted Douglas McWilliams of the centre for economics and business research as saying that the “vast majority” of major businesses still have a need to operate out of the capital.
Wed, 6th Jan 2010