West End office rents rise
Jones Lang LaSalle says rents for office space in the West End of London have risen for the first time in three years, driven by several deals amid limited availability. Prime office rents in this area of London were up 13% in the second quarter to £85 per sq ft, in a development the group says is positive for both landlords and investors.
“Looking forward we expect modest growth over the remainder of the year, ending 2010 with a year-end prime rent of £87.50 per sq ft,” said Jonathan Evans, head of West End agency and development at JLL.
In the City meanwhile, prime rents continued to rise during Q2, reaching £50 per sq ft (up 5%). Neil Prime, head of the markets group at JLL, says growth in rents for City office space is expected to remain steady for the rest of 2010 but then between 2011 and 2013 rental growth is forecast to strengthen to double-digit levels, driven by a shortage of prime stock.
Occupier demand is the key downside risk in the short term for the Central London market, but JLL is sticking to its long-held view that the recovery will be supply-led.
