Offices To Let St James

Office rents in the City of London, West End and Docklands have finally stopped falling in the fourth quarter of 2009 reveals research by NB Real estate agency business leaders.

headline rents through offices in the city stabilized from £ 42.50 per m² in the West End £ 65 per m² in the Docklands to 30 pounds per square foot in the fourth quarter - all unchanged from the previous quarter (Q3 09 ).

NB Real Estate said that it puts an end to more than two years of decline. In the City of London average Grade A office rents are now 39% lower than their peak in Q3 07 (£ 69.50 per m²). West End average over 50% compared to £ 135 per m² maximum rate achieved in 07 and T3 in the Docklands, they dropped 40% since their peak of 50 pounds per square

Although there are some exceptions to these falls, but they were few. Even the rent for the city's most exclusive Mayfair and St James are more than 35% lower than they would have been at the forefront of the market.

According to NB Real Estate stabilizing rents finally brings an end to what looked like a free fall only 12 months ago.

Gillett says James, director of city offices in New Brunswick Real Estate: "The owners will be encouraged to reach this point in the cycle after such a relentless downward spiral."

The amount of vacant space in the city of London has fallen by 12% last quarter alone 7.6million square feet of 8.6million square feet in 09 Q3. The amount of free space in the city peaked at 10 million square feet in Q1 09.

In the Docklands, the other major center for financial services companies, the vacancy rate has dropped even more dramatically, rising by 14.2% in Q3 09 to only 10% in Q4 09.

Comments James Gillett: "Within weeks of Lehman Brothers investors in commercial property expected of horror awaited investment banks flooding the market with their excess space. It never really happened. "

"While capital values have recovered significantly over the last 9 months because there is now evidence of improved fundamentals will be the view that it will not be just another bubble. Many began to question the strength of the recovery in prices and highlighted an extreme shortage of stock investment and the huge demand for favorable exchange rates as international buyers of classic symptoms of bubbles.''

"Headline rents only tell part of the story, of course. In Q3 we spoke of four years of free rent that Nomura is believed to have negotiated a lease for 20 years at UBS in Place the watermark. There is no question that this marks a high point for the incentives and the owners take a much firmer line now. "

NB Real Estate said that the question on everyone's lips is whether the uncertainty surrounding the elections, the spending reductions and tax increases will derail the resumption of the office market.

Gillett added: "No question, there is a real risk of a short-term blip feeling but the underlying dynamics of the market make it very well insulated from a steep plunge again and is well positioned to continue recovery at least a double dip in the overall economy.

2009 saw the lowest volume of new office construction starts in the city of London since 1993 with work starting in 2009 as 486,000 sqm of new offices. Other than 1993, the last twelve months have seen the lowest level of a new office starts in the city since records NB Real Estate started in 1977.

Gillett said: "With the supply pipeline to ease the medium to long term market and demand remains relatively modest in the same context, it is not surprising that investors and developers are increasingly confident about the medium-term health of the market. "

NB Real Estate said it expects the shortage.