Global Premises

A report from King Sturge states that the hike in rent rates not withstanding, interest will return to London property in coming years. The report follows much discussion among analysts and industry players as to whether the sudden increase in rents will scare away businesses from maintaining and taking up new offices in the city.

The huge surge in demand for desk space London has pushed up rents here. There is another contributing factor to this increase- the improving condition of financial institutions as the effects of the recession begin to wear off. A combination of these factors and the upbeat climate post recession has caused a hike in rents here while reducing the amount of vacant office space available for new prospective tenants. Given these circumstances, industry analysts are predicting that banks and financial institutions may soon opt to move out of the city of London to offices outside to reap the benefits of lower cost accommodations.

However, the property group King Sturge has differed in its view. According a report published by them, financial institutions will still choose to remain in London even if they make statements to the contrary at present. This is because London is a well established market for many business needs. Also the city has a global presence which not many others can match. These advantages will make London a most attractive location for office spaces in spite of large rental outflows. In fact, in the coming years many banks and financial institution may come into London to take advantages of these unique benefits from overseas locations like China and France.

According to King Sturge analysts, an 11% increase may be seen in average rents in London in near future which would be a heartening development considering that during recession rents fell by 40%. By 2010 end King Sturge predicts that average rent in London will touch £48 per square foot.