A RETURN of confidence in the economy and a bounce-back in demand for space will see London office rents reach a record high by 2018, according to research out yesterday by Knight Frank.
Rents for prime office space in the City rose by 9.1 per cent to £60.00 per square feet last year compared with the previous year.
This was driven by a 40 per cent rise in take-up as firms who shelved plans to move during the recession renewed their hunt for offices.
Knight Frank predicts that City rents will rise to £65.00 per sq ft this year, and then by 25 per cent to £75.00 per sq ft by the end of 2018.
That compares with their previous peak of £69.50 per sq ft in the third quarter of 2007.
“London’s office market rebounded last year, and the momentum is set to continue,” Knight Frank’s Stephen Clifton said.
Meanwhile West End rents are set to rise from £97.50 per sq ft at the end of last year to £105.00 per sq ft in 2014 before reaching £120.00 per sq ft by the end of 2018.