London has recorded prime rental growth of 25 per cent in 2010, with rents reaching £55.00 per sq ft at the end of the year.
The statistics were gained from the end of year report from Drivers Jonas Deloitte research. This is the largest annual rental increase in the London office space for 22 years.
The rise in rents is due to the resurgence of demand among corporate occupiers in the midst of limited supply of prime Grade A office space.
Head of research at Drivers Jonas Deloitte, Anthony Duggan stated: “City rents have recovered quickly and rents are now back up to £55.00 per sq ft for a typical Grade A letting of 10,000 sq ft.
This bounce-back isn’t surprising given the level of tenant activity and increasing shortage of prime space.”
Take-up data for the City also highlights the strong performance in 2010 with just under 6m sq ft transacted, this figure demonstrating the highest leasing activity for 10 years.
Duggan continues: “After a significant slowdown in the face of the financial crisis, the London market has bounced back in terms of both occupational and investment markets.
Although we are not expecting rents to continue at the pace seen in 2010, we do expect double-digit rental growth again in the City,” he told the Financial Times.
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