London is 'key place for commercial property'

10 August 2011

Written by David Whittaker

People seeking a commercial mortgage may receive better yields if they purchase land in London.

Rental fees in this city can reach £100 per sq ft in the West End, although this figure is £40 in "large swathes" of the capital, Savills director of commercial research Mat Oakley said.

Larger businesses are not inclined to leave the area as the cost of doing so is significantly more than the savings reduced rent would create, he continued.

Many big corporate occupiers are moving to fringe locations but have no immediate plans to relocate outside of the capital altogether, Mr Oakley noted.

There are "reasonable landlord inducements", while "pretty attractive terms" can be realised in London, the expert added.

He declared that the trend of leaving this city and moving to regional locations in the UK has not been seen since the 1980s.

During July of this year, the average rental fee for central London offices grew 0.8 per cent, the latest UK Monthly Index from CB Richard Ellis found.

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