The commercial property market in London
is in good shape, despite raised concerns over the impact of government spending cuts. However, the latest quarterly commercial real estate outlook from chartered surveyors and consultants Cluttons forecasts that across the region gaps are opening up geographically.
In addition, the organisation predicts that the market faces an uncertain future over the next 18 months. This will be a result of fragile economic growth compounded by the impact of the recent comprehensive spending review.
"The All Property average performance will mask wide variations between market sub-sectors. We forecast that offices will consistently outperform other sectors over the next five years, but the two-tier market is set to exaggerate further," said John Barrett, head of commercial valuation.
According to the report, West End offices have seen further hardening of yields while prime offices yields outside Central London have moved the other way. Furthermore, rents in the West End have also crept upwards as a result of a shortage of space and lack of development.
- Tuesday 02 November 2010