As the London economy continues to improve, the commercial property market is feeling a little short of options.
The Royal Institution of Chartered Surveyors (RICS) has released figures concerning the rapid decline in the number of available commercial properties across the UK, especially in London.
Commercial surveyors are in agreement that the conversion of commercial property into residential units has exasperated the situation. 1998 was the last time over a third of surveyors noted a shortage of commercial buildings available. Over 80% of surveyors in London believe this trend is having a negative impact on the industry, in comparison to that in the North of England where 50% agree with the study.
This lack of availability is a positive for commercial landlords, with the lack of options, driving rents upwards. Looking at commercial office rents across London within the past year, we have seen an average increase of 4.3% to 5.5%. This is backed up by CBRE's recent publication titled Global Prime Office Occupancy Costs, which has awarded London's West End the title of the most expensive office market in the world, with London City ranked in 7th.
This shortage is only going to become more acute and occupiers are going to have to start increasing their rental aspirations.
At Gryphon Property Partners, we advise clients on the acquisition and disposal of office space. If you would like to know more about the Central London office markets or would like to discuss your potential office requirement, please do not hesitate to get in touch. Please call on 0203 440 9800 or email us at firstname.lastname@example.org and someone will be in contact.