London office space 'increasingly in demand'

12 July 2011

Written by David Whittaker

Commercial mortgage holders with offices in central London may be pleased to hear that Grade A space is increasingly in demand.

This is according to research from Colliers, which found the shortage of this type of stock has pushed rents up in the West End, with some areas already experiencing double-digit growth during the first half of 2011.

Occupancies in this location also rose faster than at any time since the credit crunch, reaching 94 per cent, a level not seen since the second half of 2005.

Availability has not been so low in central districts for 30 years, with cost-conscious investors also purchasing second-hand property, pushing its availability down by 19 per cent since January.

"Double digit rental growth is likely to spread to the majority of West End submarkets," head of central London offices at Colliers International Mike MacKeith predicted.

"Competition for Grade A space will remain the key driver of rental uplift during the remainder of 2011," he asserted.

This follows a report from the Royal Institution of Chartered Surveyors, which found that London office space had the best investment outlook in the whole of the UK during the second quarter of 2011.

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