The level of rental growth in city of London offices appears to be on the road to recovery thanks to an increased demand for occupation within the financial sector, according to the latest Global Office Rental Cycle by CB Richard Ellis.
The report, which measures prime rents, vacancy rates and take-up levels across global markets, found that Middle East, Africa and Europe had gained strength in office rental potential.
However, there are fears that government debts and policy issues could hamper the market performance for the remaining quarters of the 2010.
This London market currently leads global recovery in real estate rents, particular with regards to London’s West End commercial property market, measuring the highest increases in in rents during Q2 2010, according to the Q2 2010 European Property Clock by Jones Lang LaSalle.
The commercial market in London has also attracted a lot of attention from Asian investors, who according to property company Savills, have always been strong buyers of residential properties.
Chief of Savills, Jeremy Helsby, said, “Sovereign wealth funds are looking at London. It’s a fairly select number of investors. The Chinese government’s desire to contain overheating in the residential market, continued concerns over economic growth in many countries and prolonged low levels of debt availability indicate that the recovery is likely to flatten off during the coming months.”
At this stage, it is still somewhat difficult to judge where the market will go and the future predictions; however with sustained growth and demand, it is likely that the commercial property of market of London will continue to strengthen and progress effectively.