The market for commercial property in London is expected to continue recovering well, even if this recovery is not matched in the broader economy. With talk of uncertainty following the deep cuts of the Comprehensive Spending Review, analysts have argued that there are enough factors to offset these in the capital.
Public sector efficiency savings and job cuts are expected to weigh on office space in London, but this drag should be countered by acceleration in the private sector, as well as factors unique to the capital – namely, the limited supply and the lease expiries due over the next few years.
Certainly investors – particularly from overseas, due to the comparatively weak pound in recent months – have not been slow to look for bargains after the market lows. Share prices for Land Securities and British Land, both of which have high exposure to London office space in their portfolios, hit one-year highs recently.