Commercial Property News

Commercial property rents could fall at the end of the year, an expert has predicted, but the situation in the City of London may be more favourable.

There is a risk that commercial property rents will fall towards the end of 2010 due to overvaluations.

This is according to Kelvin Davidson of Capital Economics, who noted that the recent “mini boom” that has taken place in the sector is increasing the chances of declines taking place “later this year and perhaps in 2011”.

“Our view for the average city rent is that there will be further falls this year,” he remarked.

However, Mr Davidson observed that an increase in recruitment in London could help boost rents in the City, but this is likely to be between 7% and 10%.

But the West End is unlikely to favour so well, as Mr Davidson observed that this area will probably see a decline, although prime rents may rise and secondary properties could fall.

He was commenting after King Sturge issued its property predictions for 2010, noting that rents outside London will continue to slide, but at a slower rate than they did last year.