One year of office space left at current rates


Sentiment has been bleak in recent weeks about the prospects for the UK’s market for office space. London has consistently bucked the trend, however, due to its continuing attractiveness for businesses and the dearth of new developments. Figures currently show that, at current rates of letting, the City has just one year’s worth of grade A office space left.

Basic supply and demand requires that this has a knock-on effect on rents, which has been observed in practice over the last few months. The recovery in this specific sector has also been driven by large external investors, including pension funds and sovereign wealth funds, who see the minimum of 5 percent yields as highly attractive compared with the low interest rates and uncertain prospects offered elsewhere.

The difference in the City is so marked that some analysts view the situation in the UK as polarised between two markets: Central London, and everywhere else.