Rents for prime London space are set to soar over the next five years, it has been predicted, as demand fails to meet supply amid improving conditions in the wider economy.
Estate agent Knight Frank forecasts that the average rent for West End prime offices will rise from today’s figure of £85 per square foot to £125 per square foot by 2015.
The City of London is expected to see a similarly marked increase. Currently office space in London’s financial hub stands at £55 per square foot. By 2015, this is expected to have hit £72.50 per square foot.
The trend will be driven by a shortfall in supply, caused in part by a number of high profile developments being abandoned at the height of the credit crunch, in tandem with recovering demand.
Stephen Clifton, an investment partner at Knight Frank stated: “Central London is the gold bullion of world property markets with strong rental growth driving investment performance.”
News of developments comes after it was announced that the so-called Walkie Talkie tower at 20 Fenchurch Street is expected to be almost in a matter of months. The project had previously been on ice.