Madrid and Frankfurt could be the beneficiaries if prices for commercial property in London continue to rise. That’s the view of some leading commercial property experts in London who fear that the boom in prices in London could be driving some overseas investors away. However the price boom is of course beneficial in other areas as it will help bolster rental values.
There is of course a danger that the boom could be short lived, especially if there is a so called “double dip” recession, where the economy falls backwards. Much of the growth in the London office market is being fueled by new investors, many of which are cash rich looking to acquire prestigious office schemes while prices are historically low. The other driver is the lack of space from new stock, as construction work lessened because developers could not get accessed to liquidity.