London Office lets increase 98%

Office lets in central London have increased by a staggering 98% in the last three months.  It seems that the commercial property market may slowly be turning the corner, as companies and investors take advantage of rock bottom prices.  Those companies that are looking for office space have been encouraged to sign lease agreements now, while the generous incentives and low rental values are still in place.

The data which has been supplied by NB Real Estate shows that office take up volume increased from 923,000 sq ft in Q1 to 1.8m sq ft in Q2.  Despite this however, the vacancy rate increased in the City of London from 10.2pc to 11.3pc.  The West End vacancy rate is now 8.4% as new stock appears on the market.

Experts say that many businesses in the UK postponed decisions about moving property in 2008 because of the volatility in the market.  However as it seems prices are now bottoming out, companies are willing to put pen to paper and secure new space.  This carrot is also accompanied by a proverbial stick in the form of the abolition of the empty rate relief which means landlords are now burdened with a much higher costs for any empty buildings.  A cost which is set to increase as much as 90% in prime locations, as reported by us last week.  It is argued this has pushed landlords into deals which otherwise would not have taken place.

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