A leading London property development company is concerned about the effect of the Eurozone crisis on London’s commercial market. The chief executive of Great Portland Estates has expressed worries over the state of the office rental market as the company struggle to secure lettings for a future London property development.
The Eurozone debt crisis is putting the brakes on London property development as less companies look to expand into new buildings in the the city, according to developers Great Portland Estates (GPE).
Toby Courtauld, chief executive of GPE, has warned that the repercussions of the sovereign debt problems in Greece and Italy would affect rental values in the short term as tenants held back from signing new deals.
Until recently, the flood of capital from overseas investors pouring into the city’s prime commercial property stock had helped GPE survive the downturn better than some of its more nationally spread rivals. However, the worry over the state of the Eurozone seems to have effected the company and the development industry in general as the state of the bank financing market has resulted in a dramatic downturn in London property development.
Commenting on the situation Mr Courtauld said “Demand from tenants is looking a bit softer than it was four months ago. But there is not a lot we can do about what is going on month to month and we are optimistic about the next three years.”
The comments from Mr Courtauld came after GPE’s concerns that they are not expecting to find suitable lettings needed to kick-start the company’s planned London property development 100 Bishopsgate in the City for at least another six months.
Great Portland Estates, which has bought a number of properties over the past 18 months, including the ITN headquarters on Gray’s Inn Road, are planning to build the tower in partnership with Canadian develops, Brookfield.