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London’s Docklands is the area in Europe where rents have the greatest chance of increasing – because a general lack of office space means that vacancy rates are standing at an all-time low, it has been claimed.
A report from Moody’s Investor Service says that the Docklands area, including the Canary Wharf financial district, is Europe’s top prospect – while Dublin and Warsaw are the two cities in which rents are most likely to fall.
More space is being built than take-up in these two cities, says Moody’s. Conditions could worsen because the credit crunch and crisis in the sub prime mortgage markets could mean there is less demand from investment banks and other financial firms for office space.
The UK’s main business district, The City of London, is "likely to be most at risk from a downturn in letting activity due to its high proportion of financial-services occupiers", the report states.
Canary Wharf Group had a vacancy rate of 0.5 per cent from 7.9 million sq ft at the end of June this year.