London office rents are climbing at their fastest pace since the financial crisis, according to figures published today by a commercial real estate company.
Rental values in Central London rocketed 10.3 per cent in the year to October, CBRE said, the first double-digit growth since April 2008.
Demand for office space is high with 3.6m square feet of space snapped up by businesses between July and September. CBRE says 3.8m square feet of office space is under offer and expected to be rented out before the end of the year.
Kevin McCauley, head of Central London research at CBRE said:
London’s office market has been heating up for some time now, but there is still strong business demand across the capital. Rental value growth has not been this sustained since before the financial crisis, and together with rapidly rising property values, landlords and investors are experiencing a booming market.
Legal and the General, the UK’s biggest fund manager, said this month that commercial property prices had risen nearly 20 per cent since the start of 2014 in part due to insufficient construction.
Other research from CBRE shows that around 6m square feet of office space in England – roughly equal to the entire office space in Oxford – was converted to residential use in 2014 under new rules that remove the need for planning permission.