The findings published by the CBRE show that the London commercial property market remained constant as the rest of the U.K office space sector struggled to keep up.

UK commercial property performance remained constant in October, with total returns of 0.6 %, matching September’s figures, the latest findings by CBRE’s monthly index has shown. performance in London’s West End and Midtown was stronger than the previous month at 0.8% and 0.9% respectively.

David Wylie, Head of UK Economics & Forecasting at CBRE, said, “With the UK market as a whole seeing virtually no movement in yields over the past six months, rental growth has provided the key difference. In the year-to-date Central London offices have seen values rise by 6.3%, which has been almost wholly supported by rental growth.”

As London offices continue to prosper the demand for them remains high making any space that is available an opportunity that should be snatched up.

Source: London Offices

Figures released by Cushman & Wakefield show that London office space leasing has defied the national decline in take-up.

The firm claim that more than two million square feet of commercial space was leased in the West End, Docklands and the City, representing a fifty four per cent rise compared to the last quarter’s figures.

The capital’s office space market has remained strong despite the current weak economic climate and quiet growth in other property sectors.

The demand in West End office space was highest among technology, media and telecommunication industries. The office space supply in West End, however, fell from the first few months of 2011 and the current rate of vacancy stands at 4.6 per cent.

A little more than two million square feet of office space has been let at West End so far this year, with Camden PCT at King’s Cross and Regent’s Palace’s Debenhams recognised most notably. These leases combined amounted to about 150,000 square feet of the total space let to businesses.

More recently, close to 200,000 square feet of new office space was made available across more than four buildings.

The firm’s research also showed that rents in prime areas have remained stable, with just a three per cent growth last month. This has made office space in the capital’s sought-after-areas quite affordable, and promises good signs for the future of the London office space market.

Source: London Offices News

This week publishing group Reed Elsevier has kicked off a search for up to 100,000 sq ft of office space in central London, as it attempts to consolidate its office use in the capital. Reed Elsevier are not the only business in search of office space in the capital and their search exemplifies the sought after nature of offices in the Capital.

With businesses both national and international still searching for prime space the demand for offices in London is set to remain high.

Source: Property Week

Non-European buyers have always been vital for the European market. They invested €24 billion in commercial real estate in 2010 and the first half of 2011, with North American investors accounting for €3.1 billion of that. London received €5.1 billion of this, CB Richard Ellis claims.

London is also expected to benefit further throughout the last two quarters of 2011 with foreign investors who are looking to invest in the European market, but looking to stay away from the delicate euro zone situation.

Robert Hodges, managing director of Carlyle Group said: “The U.K. has been one of the most-active markets for our fund, as there is liquidity in the market, represented by the number of properties on the market, and a more realistic view of pricing compared with some Continental markets. The exchange rate and low interest rates are favourable, and the fundamental longer-term growth prospects are encouraging.”

London once again remains in a good position compared to the rest of the country, illustrating the continuous demand for luxury offices in both the city and the West End.

Source: London Office

The month of September saw the West End receive a significant jump of 46% to 406,000 square feet, due to Debenham’s decision to take 145,000 square feet of office space at British Land’s 10 Brock Street. Overall, office take-up rose in the third largest central London office markets, with Central London rising to 157,000 square feet and the City increasing to 337,300 square feet.

As as a result of the reduction in space under offer in all markets continued to fall in September and October except in the City. The trend currently stands at 15% below the year’s most recent peak, in June, however the figures are still significantly above trend the current national trend, with 2.7 million square feet of let office space  in London.

This level of activity has pushed office market rent-take up for the third quarter of 2011 to 2.7 million square feet, the highest quarterly total of the year so far. The figure is a welcome surprise compared to second quarter lease amount of 2.2 million square feet.

Digby Flower, Executive Director, CBRE, said: “Weak economic conditions and concerns about the eurozone debt crisis have been a significant constraint on leasing levels, “however, a second consecutive month of strong leasing activity in Central London has been very good news for the market,” he added.

Source: London Offices

In the West End £1.38bn was transacted in the third quarter across 34 deals – an increase of 18% on the same period the previous year and prime yields were unchanged at 4%. Prime rents stand at £95/sq ft and vacancy rates are 2.2%.

The City has accounted for over half of the total investment deals for the period to the end of the third quarter with over £4.35bn transacted. 59% of this investment has been from overseas, a significant rise on the 31% for the same period the previous year.

Chris Northam, director in the City investment team at Jones Lang LaSalle said, “We have seen a significant increase in the amount of available stock in the past couple of weeks, driven in part by short-term debt maturities or fund redemption issues. However, there are strong levels of demand from both the domestic and overseas investor markets, particularly for realistically priced prime investments and active management, value add opportunities.  Historically the final quarter of the calendar year accounts for roughly 35% of annual turnover in the City and the final three months of the year should continue this strong trend.”

Although the economic climate is for the vast majority looking bleak, London properties have been having a good year in comparison. West End office property is going to continue going up in value and in demand over the next three years according to research.

Source: Property Week

George Shaw believes that Central London offices will be the top performing sector over the next three years, although he warns that by 2013 the margin of outperformance will be significantly reduced.

In addition, he predicts rental growth in the retail sector, with the exception of London and the South East and the top 20 or so locations, will remain at a level well below those delivered by the High St sector over the past two decades.

With Mayfair offices already in high demand the future looks bright as demand and value looks set to stay out performing the test of the UK.

Source: Property Wire

West End offices have again been given the all clear as they remain in high demand. International companies as well as home grown ones are looking for office space in the West End keeping demand for space and development at an unprecedented high in terms of the economic climate.

The city of London, especially the West End is majorly outperforming the rest of the county. Huge investment is being made to enhance the quantity and quality of shopping in the West End as well as to develop office space.

Retail has been called a catalyst for regenerations and renewal and market specialists argue that this could be a factor in the performance of West End office space.

Over the next five years the BID (business improvement district) will inject £20m to provide cleaner, safer and more welcoming streets and compelling marketing campaigns. Investments such as these are maintaing the desirability of the area meaning that office, retail and residential spaces are all in high demand.

So far this year retail sales in the West End have outperformed the national average and have done so now for more than three years  up by 4.2% compared with -0.1% for the rest of the UK. Footfall is up by almost 4% year on year, compared with a national fall of nearly 2%.

The investment that is being put into the West End makes it an extremely desirable place to work and it is because of this that office space is in such high demand.

Source: Property Week

The second quarter of the year saw investment activity in the West End reach £962 million, 24% ahead of the 10 year average, driven by expectations of future rental growth. According to figures issued by leading property consultants  and chartered surveyors Cluttons.

Cluttons reports that this under supply of space, which drove rental growth of 5.5% in the West End over the last quarter, is providing investors with greater security in the face of a very cautious, albeit strengthening, business environment in London, and growing concerns over a potential over-supply of office space in the City market.

Given this backdrop overseas investors remain active in the West End. Buyer profiles remain broad based, although Canadian and Malaysian funds are currently leading the way amongst international buyers, all of whom are benefiting from the weak pound.

The confidence in the West End can be seen to be reflected in developments. The second quarter witnessed a doubling in the amount of office space submitted for planning permission. It has been predicted that over the next couple of years a number of residential conversions will be seen.

London’s West End office market is showing continued strength as the capital maintains its economic outperformance. The high level of demand is restricting occupiers helping to maintain rental growth.

“We expect strong investor demand for West End assets to be maintained despite the fragile financial climate,” said John Wood, head of Clutton’s commercial division.

Source: Property Wire

The Executive Office Group this week published a report that shows that the occupancy rate of its serviced offices in St James’s has increased from 77% last July to 85%. Other reports and statistics suggest that while the rest of the country remains stagnant the West End can attribute its continued demand to the need for offices from the financial services, commodities, consultancies and oversee properties. John Drover has suggested that tenants now want to stay for 33 months compaed to last years 30 months which has brought stability to the market.

The Investment Property Forum consensus forecasts are for rental growth in the City of 8% next year and 6.6% in 2013 and 8% and 6.4% in the West End. The forecasts assume some continuing yield compression. The assumption is that London offices will continue to be a safe haven for global capital.

Source: Property Week