THE hard-hit commercial property sector is finally showing signs of life, according to a new survey from the Royal Institute for Chartered Surveyors (RICS) published today.
In London, the amount of office space available to tenants in London declined for the first time in two years and rents are no longer expected to fall in central London offices.
The RICS data showed eight per cent of chartered surveyors reported a fall in available floorspace in London, down from a positive balance of 37 per cent the previous quarter.
Oliver Gilmartin, RICS senior economist said: “To be sustained, the rapid rise in capital values in the London market needs to be supported by further rental increases particularly as prime yields are rapidly approaching financing costs.”
He added: “The reluctance of banks to lend to developers has clearly added some support to rents in London as available space is no longer rising outside the retail sector. Significantly, development starts continue to fall back.”
Confidence in the outlook for lettings activity also improved in the fourth quarter of 2009. Enquiries to occupy space rose across all three sectors: office, industrial and retail.