Empty office space in central London will reach a peak in 2009 but stability will return in 2010 as the economy grinds back into action, industry analysts have predicted.
Office space rent is likely to continue to fall as demand slackens in 2009 but 2011 could see positive growth of around 27% if the projections are accurate.
Vacancy rates at the end of 2008 ran to 8.3% as previous tenants did not renew their leases and new ones proved reluctant to invest.
Much of the 3.7 million square foot of new take-up in Q4 of 2008 was due to JP Morgan’s 1.9 million square foot purchase of space of Canary Wharf’s Riverside South. Office space vacancies in Central London have now risen for the fifth consecutive quarter; as a whole for 2008, take-up was down 22% on 2007.
The expectation of strong growth from 2010-2012 will be welcome for London’s commercial estate agents.