INDUSTRY NEWS

Cheaper rents in 2008

Rents are set to fall this year, according to one City analyst.

The prediction from Lehman Brothers analyst, Mike Prew, was in a research note he released on the sector, seen by Property Week, in which he suggested rental values would face a ‘short sharp shock’.

"The industry’s ‘hot potato’ this year is, we think, the rental growth assumptions factored into property and REIT prices," Mr Prew said.

If his predictions prove true, it will be good news for firms looking to move into new offices in London.

Lehman Brothers said it expected a 15 per cent fall in city office rents and suggested retail warehouse rents would go down by ten per cent.

Mr Prew noted that confidence has fallen "with occupiers already holding back on space decisions until there is some clarity about the effect of ‘global cooling’ on their business".

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