Report hails West End market - commercial mortgages

26 July 2007

A new report on commercial property investment in Europe has reported that London''s West End is continuing to display high levels of rental growth as demand for office space continues.

The office sector has continued to attract highest demand, the Knight Frank European Investment Report notes, fuelled by strong economic growth in both London and Europe as a whole.

However, landlords with commercial mortgages may have experienced lower yields because of the record levels of investment seen within the sector, the commentary advises.

Yet the report notes that "nonetheless, the volume of capital being invested [in the UK and Ireland] is set to remain high".

Returns on all property in the UK last year were over 17 per cent, the study showed.

The research mirrors earlier Knight Frank analysis, published this month, which revealed that office rents in central London were rising at their highest levels for seven years.