The shortage of London office space has seen letting office specialist landlord Derwent London’s rent prices increase by 11.2 percent on new lettings.
Derwent, which lets space in Shoreditch and the Tech City, also saw the space shortage drive up existing tenants rents by 17 per cent.
The demand for office space, saw Derwent bring in £9.2m of new rental income last year, letting over 188,000 square ft of space. This resulted in the firms overall portfolio value rising by 16.1 per cent to £4.2bn.
With a final dividend increase of 8.7 percent, John Burns, chief executive, comments that the firm expects to see rental growth to maintain at 6- 8 per cent across the Derwent portfolio. He predicts another year of overall strong rental growth, with evidence showing a commercial property slowdown in London.
Oxford economics predicts the creation of 275,000 new London office jobs within the next five years. With only 11m square ft available in London today, Burns adds that this implies the need for 23 square ft of new office space. Therefore Dewent plans to spend £393m on new development over the next few years.
By: Kirsty MacGregor
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