Rent rise in offices due to acute shortage of space in Central London
A lack of office space and decrease in development work means rent in the centre of the capital may rise significantly.
The record low in the building of new offices means the spaces available are a rarity making it easy for landlords to hike up the price.According to the Drivers Jonas Deloitte Crane Survey no construction work has been recorded in the centre of the city for the past six months but six schemes are up and running in the West End.
However, these building projects make up only 10 per cent of the office space developed in London in comparison to the amount of building work at the same time period in 2007 during the economic boom.
Matthew Elliott, partner at Drivers Jonas Deloitte, said: “Will we see a flood of development activity? Probably not. The outlook for demand remains, at best, uncertain. Rents will rise over the next 12 to 18 months due to the acute shortage of space”.
He continued: “The old 25-year leases that the big banks and legal firms took out in the late 1980s are coming to an end and these firms are scrambling to find replacement buildings”.
According to The Times the present new-builds that will benefit from the tandem problem of the lack of space and demand for offices, include Minerva’s The Walbrook, Cannon Place, by Hines, and Heron Tower on Bishopsgate.