London commercial office demand ‘outstripping supply’

Posted 13/07/2011

Demand for London commercial property is exceeding supply in many areas of the capital, which will result in further rent rises, according to one expert.

Chief economist at the Royal Institution of Chartered Surveyors (Rics) Simon Rubinsohn explained the cost of letting such real estate – and offices in particular – is set to soar.

“Rents are likely to rise in the near term,” he predicted, adding that Rics members are reporting that “supply isn’t coming on tap” to meet demand from prospective tenants.

He noted that the “sharp curtailment of development” that occurred following the credit crunch is the main reason for the limited availability of properties at present.

Research published by Colliers International earlier this month revealed occupancy of office space across all core locations rose in the first half of 2011, with net stock absorption climbing to 1.8 million sq ft.

Availability of Grade A stock in the centre of the capital has dropped 17 per cent in the past year, the study found.

The team at Ashtons Legal are on hand to offer advice regarding commercial property law, including sales and leases.