Booming interest in London offices has pushed the capital’s commercial property market way ahead of the rest of the UK, according to a new report.
The Royal Institution of Chartered Surveyors (Rics) found London was outperforming the rest of the UK in terms of higher office take up, better rent projections and the need for less incentives to attract tenants.
The latest research, for the three months to June, found availability of London commercial property at around +2%, compared to rising availability in the north of the country at around +22%.
Similarly, London offices require less incentivisation to find tenants – whereas the Midlands and Wales, for instance, have a large number of incentives available to push up tenancies.
As a result of this, London is the only area in the UK with positive rental projections, which is being directly attributed to the office sector, with the financial services industry growing rapidly in the capital.
London also has more new developments on the horizon than anywhere else in the UK – whereas Wales and the Midlands saw a 17% drop in new developments.
Simon Rubinsohn, Rics chief economist, explained: “The striking feature of the latest Rics survey is the divergence in responses we are receiving from London and the rest of the country.
“While the London property market will continue to enjoy the trappings of recovery, in many other parts of the UK, it could feel as if the icy winds of recession are continuing to bite.”
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