Looking For Office Space to Rent in London Despite the Credit Crunch?
Knight Frank suggests that banks and financial institutions have increased their need for short-term lets by over 80% within the last few months, taking up contracts of around 18 months. In the past, the time involved would have recently been anything from 10 to 20 years.
This change of center reflects the theory that many of the major banks are considering sizeable redundancies when confronted with the credit crunch. As these include implemented, the demand for renting larger buildings looks set to decrease and this will in turn drag the rest of the market price tags down. Investors had been setting their sights firmly on Canary Wharf and offices inside City as the new rental hot-spots, but a drop successful has already reduced your rise in rents which were anticipated to last till 2010.
With the entire market following the banks, demand for office room or space is slowing, forcing landlords to reduce their prices. Whilst they may not might like to do this, it is a more prudent move than having their workplace in London sitting empty before economy recovers. Those benefiting from the lower priced offices in London are also finding it quicker to uncover suitable property. A recent report through the Daily Telegraph has identified that most tenants can now find London offices and are viewing between just six and ten properties, compared with much higher viewing figures over the last few years. In short-term, as a result in the credit crunch the office environment rental market in London has become a tenant’s market.
The Royal Institute of Chartered Surveyors has made a prediction that will spell further bad news for landlords, and offer further benefits for tenants. They foresee that growth for office accommodation in London could fall to ‘sub-inflation’ levels by way of the end of the 12 months. The reason behind this is that, with so many offices threatening being unoccupied, there is also an excessive amount of supply over demand. This looks set to work in the favour in the tenant. Add this to the point that there are over 12 million square feet of office space being built in the administrative centre, and the future with regard to landlords looks pretty bleak.
London’s office tenants look set to be able to enjoy a side benefit that is generated by the credit crunch, for the reason that state of the current economic climate forces landlords to press their prices down or face a predicament where many of their offices remain empty and unused.
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