Global real estate adviser DTZ yesterday said rents in the City would rise by eight per cent in 2010 – faster than previously expected.<br /><br />And DTZ said that London would lead the rest of Europe out of the property slump, due to a lack of supply in the capital. <br /><br />It upgraded its forecasts after the volume of leasing transactions jumped by 60 per cent in the third quarter, with availability falling by five per cent.<br /><br />The jump in City rental values follows a period of sharp decline, after the financial crisis took its toll. <br /><br />Head of UK research Martin Davis said: “London rents fell sharply in 2008-09, while occupier markets elsewhere in Europe have been slower to adjust. <br /><br />“And now, with yields starting to move in, and occupier markets showing early signs of recovery, London once again seems to be leading the way.”<br /><br />But rents in the rest of Europe are expected to fall, or stabilise at best, in 2010. European rents are predicted to fall by another 13.4 per cent by the end of 2009.<br /><br />DTZ said that the cost of prime office space in Rome, Munich and Luxembourg will also fall in 2010. <br /><br />The group says Rome will suffer a 5.4 per cent dip, with Munich and Rome both facing a three per cent fall in rents over the course of 2010. <br /><br />This is because they have lagged behind the rest of the commercial property sector in the slump, so will recover later.<br /><br /><strong>FAST FACTS </strong> CITY RENTAL DECLINES<br />&9679; DTZ yesterday forecast City rents to rise by eight per cent in 2010, leading the rest of Europe out of the property slump<br /><br />&9679; DTZpredicts European rents to fall by 13.4 per cent by the end of this year.