Office rents in London at set to increase in 2010 as the lack of new builds has finally filtered through to the market. Prime London office rents in the city currently stand at £42.50 per sq ft and £75 per sq ft in the West End. Commercial property experts in London say that a busy last quarter of 2009 meant that much of the existing workspace has now been let, which will in turn put pressure on rents. In fact in Oct/Nov/Dec of 2009, 2.6 million square feet of office space was let in central London, this is the highest figure since Q3 2007, before the credit crunch.
There is 5 million sq ft of space currently being built which is around 40% less than was the case a year ago. There is now a closing window of opportunity for tenants to secure new office space, at low rents with favourable terms form landlords. Rents have fallen from a peak of £65 and £130 in the City and West End, but look to be slowly starting to rise. However the bubble is threatened by sales of property by banks and government as well as possible rises in interest rates.