Recreation Office

Substantial Declines in London Office Space Sector

June 5th, 2009

Recession has hit office rentals hard, both inside and outside London. The situation is very bad for the landlords with rents falling by about 20% in the first quarter of this year. It has also been reported that in some places, the owners have started resorting to giving away a free stay for a year or more in return for a lease of five years.

The total space under use has also taken a dive. It is down by 56% from the previous quarter and when compared against the corresponding quarter of 2008, the decline has been a massive 70%.

Overall, office rents in the UK fell by approximately 15% as compared to last year. Meanwhile, retail rents dropped by 13% across the country as businesses tried to combat falling income and closing credit lines.

However, there are some places like Scotland, the East Midlands, and Wales, which have seen some growth in the last one year, while only the South West and East Anglia registered a growth in the last quarter. Pocket areas such as Cambridge, because of its location, remain attractive to large corporate clients and so maintain a demand for office rentals - click here for info on desk space Cambridge.

South East and West End part of London have remained shielded from the carnage being witnessed elsewhere. According to reports, this is mostly due to their excellent locations. Moreover, as the pound has depreciated significantly against other major currencies like the dollar and the euro, foreign investors seem to be getting more interested.

It has been reported that a large proportion of office space leasing business in London is owned by financial companies, and as we all know, these companies have been worst hit by the recession.

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