Office space rents in the capital are set to skyrocket this year, as supply combine constraints and returning investor confidence bring new life to the market.
According to King Sturge Prime, rental charges for prime office space in the City of London will surge by as much as 10.5 per cent to £47.50 per square foot over the next 12 months.
Meanwhile, rents in the West End will increase to £70 psf, the property consultants predicts.
Signs that the market is returning to better health come after rents in London slumped by 40 per cent since the onset of the credit crunch in late 2007.
However, if King Sturge Prime’s forecasts are to be believed the rest of the country will be excluded from the revival, with rents to continue their decline albeit at a slower rate than during 2009.
Late last year the Mayor of London Boris Johnson called for the adoption of a US-style tax increment financing (TiF) approach to funding office developments to mitigate developers’ dependence on the state.