London office market assessed

24 September 2009

Written by Simon Whittaker

The City of London office market probably turned a corner in the second quarter of this year in terms of leasing, according to director of research at Savills Mat Oakley.

He claimed that the West End may not make a similar improvement until the second quarter of 2010.

Commercial landlords with business mortgages may be in line to benefit from increased interest in such property, although Mr Oakley noted that demand for this type of office space will be "very selective".

He also warned there will still be "quite a lot of vacant stock", which means - in some cases - the number of empty offices will continue to rise, leading to a fall in rents.

The Savills researcher was commenting after Knight Frank published a study this week that predicted prime office rents in the City and West End will return to growth next year.

According to the estate agent, City prime rents will increase by four per cent to £44 per sq ft in 2010.

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