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London is set to continue in its role as a target for international investment and thriving property market, according to recent research.
As reported here during the last twelve months, the TMT sector contributed significantly to the demand felt across the capital, with large multinationals taking up space – and setting property trends in certain areas as a result. Examples are Google and Amazon, Facebook and Twitter, all focused in central London, including in newly redeveloped areas such as King’s Cross.
Elsewhere, the Docklands’ take-up rates rose, influenced by deals from the finance sector, including HSBC and KPMG. Projections are that the ‘fin-tech’ sector, which straddles both finance and TMT, will increase in visibility over the coming years as well.
With demand high and supply low, investors will be able to attract even higher rents, particularly for premium space, and with optimism in the London air and confidence from figures such as announced by Knight Frank this week, it can be assumed that investment will continue to flow into the capital.
Future events such as Crossrail, set to open in 2018 and which will link areas of London with each other, and will connect the city with faster routes to outlying regions such as Berkshire and Essex, are said to be enhancing London’s attractiveness to both investors and tenants. In addition, popularity of certain kinds of ‘warehouse-style’ office in some areas together with significant regeneration in some, previously less popular, areas, means that there is more scope than ever before for good-quality offices to rent – and more scope for competition.
The figures collated show that prime rents have risen in the City and the West End, and estimates are that rents will continue to increase, potentially to even £75 per square foot and £120 per square foot respectively by 2018.
During last year the supply of space fell, contributing to a vacancy rate of 7%, its lowest level since 2008, and, given the predictions, a rate that is likely to remain low or even fall further.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.