London property shortage causes mini-bubble


London’s commercial property market has enjoyed a surge in fortunes since the credit crunch sliced around a half from its peak values of 2007. Investors are increasingly realising that prices are historically low and may represent once-in-a-lifetime opportunities for capital growth.

Retail and office space are particularly strong movers. Over the last month, businesses have expanded to the tune of 1 million square feet of office space, bringing further optimism to the market.

However, there is a downside to this renewed activity. The limited amount of prime commercial property means that prices are being artificially inflated – in other words, with so much money chasing restricted opportunities, the market could be headed back into a mini-bubble, like the much larger one caused by easy credit in the run up to the credit crunch. Realistic prices will only be possible to determine when supply increases.