London CRE Booms Despite UK SlowdownVW Staff
There’s just something about Londoner’s that you can’t help but admire. Whether it be fighting off the enemy in a war, dealing with traffic snarls or the current state of affairs of Britain’s royal family, there’s always been a sort of courageous “Sir Winston Churchill attitude” in London. While the overall economy in the United Kingdom currently is still rather bleak, Things in London are looking up. Londoner’s have had quite a party with the Queen’s Jubilee, the 2012 Summer Olympics are just a few weeks away and London’s commercial real estate market is up, not down.
During the month of May capital growth in the central London real estate market was far above the rest of the United Kingdom. Data provided by the real estate services firm CBRE shows commercial real estate returns on commercial assets fell to -0.1 percent across Britain overall, but the central London district ignored the muck and mire and registered a rise to 0.7 percent, up from 0.5 percent in April.
Commercial real estate leasing activity also picked up significantly according to CBRE. Central London’s leasing activity increased by 96% compared to April. CBRE’s Executive Director Dan Roberts was quoted as saying, “The robust levels of take-up seen in May, coupled with a significant increase in under offers provide much cause for optimism in Central London. Whilst take-up levels are still below their long-term average, we are starting to see an increased level of activity from occupiers that will be driven by upcoming lease events and existing active demand.”
Despite the cloudy outlook for the U.K. overall, CBRE’s Nick Parker sees a silver lining in the clouds when it comes to the long-term prospects for Britain’s investment sector. “The U.K. is to Europe what central London offices are to the wider U.K. property market,” he says.
Rental growth is predicted in the Victoria district of west London for the rest of this year, as it’s a hot spot for commercial real estate development with several new commercial developments currently in the planning stages. Mr. Parker is also optimistic about the Victoria district going forward, saying: “Central London’s West End market is performing extraordinarily well, especially given the current economic climate.”