London may struggle in the commercial office market during 2012. A leading property market analyst firm have stated that London may struggle in regards to the office property market for the coming year, although it should flourish thereafter.
Office markets in London could be in for a tough year, although the office space market in London is predicted to pick up during 2013 when a raft of office properties will be completed.
The claims come from a report submitted by Jones Lang LaSalle who believe leasing office space in London will not be as vibrant over the next 12 months.
However, the report by JLL also predicts that the lull in 2012 will not prevent London from cementing its place as the number one European and global competitor office market by the middle of the decade.
Strong growth is expected to peak in 2015 with rents in the West End’s prime office properties hitting £120 per square foot and £67.50 per square foot in the City.
Investment will be largely drawn from overseas, with Middle Eastern firms, Far East companies and US REITs making up the major players in the capital’s office market. These will offset the sellers such as the German and European institutions, UK REITs and NAMA.
Damian Corbett, Jones Lang LaSalle’s head of London Capital Markets said: “London has been the most traded and liquid real estate market globally, with the lowest thresholds for entry.
“It is one of the most tax transparent markets and offers investors long leases, clear ownership structures and upward only rent reviews,” he added.
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