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5 Predictions for London’s Real Estate
At the Cushman & Wakefield London Group Breakfast seminar last week James Young, Chair of C&W’s London Group, made 5 predictions for London’s commercial real estate markets in the coming year.
1. Challenging office leasing market
The first 6 months of 2012 will continue to see diminished take-up, as occupiers sit on their hands and don’t take big decisions. However, the second half of 2012 will see renewed office take up activity, as occupiers finally decide that they have to do something. Expect to see, therefore, a pickup of activity in the second half of 2012, driven by a number of larger pre-lets.
2. Continued rise of new submarkets
There will be hot spots of office activity across London, and these will involve traditionally West End businesses moving further afield from their traditional heartland – expect to see good activity in areas such as King’s Cross, Clerkenwell, Shoreditch, Southbank and Stratford as our creative industries seek to find cheaper space in up and coming locations.
3. Stabilisation of prime rents
There will be a stabilisation of prime office rents across London, with very little rental growth in the core markets, with the exception perhaps of the supply starved Mayfair/St James’s villages.
4. Rental growth in prime retail
The real area for rental growth in commercial real estate across London is in prime retail. The lack of available units on Oxford Street, Bond Street, Regent Street, coupled with a continued desire by international retailers to be in London, will continue to drive up rentals. Could we even see £1,500 per sq ft zone A rents on Bond Street?
5. Investment in prime London real estate remains attractive
And finally, prime London property has proved to be incredibly resilient even in the most difficult of economic times. There have been attractive returns compared to other asset classes, and we believe that this will continue through 2012 as overseas investors see the benefit of London’s defensive qualities & wealth preservation.
Join the debate on debate on the prospects for London’s commercial property markets in 2012 by posting a comment on this blog.
Outlook for London
With the current uncertainty surrounding the global recovery, there are two key issues of importance to London’s real estate community – the economic outlook and the reaction of occupiers to the current climate. This one hour seminar will look at both these issues. Back by popular demand, David Smith of The Sunday Times will be guest speaker, and we will also showcase the results of C&W’s annual Occupier Outlook research.
Seminar speakers and agenda:
Session 1: The Changing Economy of London
David Smith, Economics Editor of The Sunday Times, will share his outlook for the London economy particularly in light of current economic events across Europe and the world. David will review how London is expected to perform as a global centre of finance and business over the coming months and into 2012.
Session 2: New Research: The Occupiers’ View on Real Estate
Cushman & Wakefield has commissioned new market research from Lighthouse Global. Over 500 UK corporate occupiers from a range of business sectors have been interviewed to establish their views on a number of key business and market issues and how these may impact on their property strategy. Our market experts interpret the London Occupier research results and share their insights and the opportunities with you.