London set to lead office rental upturn


Analysts have forecast that rental prices for London office space will return to growth next year, taking the lead against comparable properties in other major European cities, where the contraction is expected to continue.

Across Europe as a whole, office rental costs will fall by over 13 percent in 2009, whereas London properties have already plummeted by 40 percent or more.

Having crashed harder than its continental cousins, which will probably remain flat in terms of growth at best, London’s office space market might expand by as much as 8 percent in 2010.

According to some interpretations of the most recent figures, the bottom of the market has now been reached and vacancies have finally started to decline.

In terms of investment, London is an increasingly promising opportunity in terms of commercial property, though other markets are expected to follow as they bottom out.