INDUSTRY NEWS

Rental growth to go sub-inflation

The average office rental growth is set to fall to sub-inflation levels, the Royal Institution of Chartered Surveyors (Rics) has said.

It revealed commercial property rental prices in central London were slowing at a faster rate than other parts of the country.

Oliver Gilmartin, senior economist, explained: "We would agree that we are expecting rental growth to turn negative at a national level in 2009 so it would make sense that the City market will under-perform the national picture."

One factor that will keep rents from growing is the large number of developments, which are nearing completion.

According to CB Richard Ellis, 12.8 million square feet of construction activity is currently underway across Central London, the highest level since 2003.

The City is the centre of London’s financial sector, which is struggling following a crush on credit and warnings of an economic downturn.

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