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News
Date: 21 September 2009
No: 09pr415
Knight Frank forecasts Central London office rents to recover in 2010
London, UK - Prime rents in both the City and West End office markets will
return to growth again in 2010, following the correction seen in 2008 and
much of 2009 according to Knight Frank. This reflects less than expected
distress in the market in 2009, a significant recovery in demand recorded
in the summer, the recent rally seen in the global capital markets, and
the drop off in speculative development completions expected between 2010
and 2012.
Knight Frank has forecasted:
• City prime rents to rise by 4% in 2010 to £44.00 per sq ft
having fallen 21% in 2009 to £42.50 per sq ft
• Between now and the end of 2013 City rents to increase by 37% to £58.00
per sq ft
• West End prime rents to rise by 3% in 2010 to £67.00 per sq
ft having fallen 30% in 2009 to £65.00 per sq ft
• Between now and the end of 2013 West End rents to increase by 42%
to £92.50 per sq ft
The market has not seen as great a level of sub-let space return to the
market from tenants as had been widely anticipated earlier in the year. There
has been a significant revival in the level of active requirements, particularly
large unit searches, which are converting into deals. Examples of this are
the lettings by Nomura (Watermark Place), Bank of Tokyo-Mitsubishi (Ropemaker),
and Orrick Herrington & Sutcliffe (107 Cheapside).
The rapid correction in prime rents has succeeded in drawing occupiers back
to the market, as they have moved to take advantage of the tenant-friendly
environment. In real terms, City rents are currently at their lowest level
for more than 20 years, while West End rents are at a 13 year low.
Knight Frank has forecasted a combination of a global economic recovery
and diminishing choice of new build options to stabilise prime rents at their
current levels for the next twelve months, before rental growth returns in
Q4 2010. This, Knight Frank has predicted, will mark the beginning of a new
cycle for prime rents.
James Roberts, head of Central London research, Knight Frank said: “Rents
corrected very sharply in 2008 and early 2009 in anticipation of tenants
sub-letting large volumes of space. While availability has increased this
year, it has not been to the extent priced into the rents and consequently
rent levels have found the floor. With global capital markets and world trade,
the key drivers behind Central London’s economy, now rallying I see
demand increasing gradually going forward, with a knock-on effect for rents
from late 2010 onwards.”
Will Beardmore-Gray, head of City leasing, Knight Frank said: “The
City has seen a marked increase in activity since its low point in quarter
one. Even if you set aside the 540,000 sq ft Nomura deal, Q3 take-up looks
set to top that of Q2, which was up by a third on Q1. There is a definite
upwards trend in activity emerging - it is certainly not a fresh boom, but
it is a steady return to normality. The current wave of demand is partly
driven by Asia-Pacific financial firms, like Bank of China, Daiwa Securities,
Bank of Tokyo Mitsubishi, Macquarie Group and Nomura. I see the City as benefiting
from its status as a hub in the system of global trade.”
Tim Robinson, head of West End leasing, Knight Frank said: “Earlier
this year there was a great deal of concern that there would be a post-Lehman
implosion of the hedge fund world, leaving the West End core over-supplied.
While availability has risen significantly, the increase has been of a manageable
level, and not greatly different in size to that seen in the 2001-2003 downturn.
A major issue now will be the lack of development starts for delivery in
2011/12, particularly in Mayfair and St James’s, which I see pushing
demand into out of core locations.”
Bradley Baker, head of central London tenant representation, Knight Frank
said: "The office market is beginning to emerge from the shadow of the
banking crisis. These market dynamics are offering our tenant / occupier
clients some unprecedented opportunities. Large Central London tenants from
a range of industries are viewing this as the ideal time to act to secure
the best deal. Rents are low by historic standards, and are landlords willing
to offer generous incentive packages. Consequently, in the large unit market
I see the number of very good quality building options diminishing in the
next six months."
For further information, please contact:
James Roberts, head of central London research, Knight Frank, +44))20 7861
1239
William Beardmore-Gray, head of City leasing, Knight Frank, +44(0)20 7861
1308
Tim Robinson, head of West End leasing, Knight Frank, +44(0)20 7861 1194
Bradley Baker, head of central London tenant representation, Knight Frank,
+44(0)20 7861 1256
Naomi Curtis, commercial senior PR executive, Knight Frank, +44(0)20 7861
1744
Ends
Notes to Editors
Knight Frank LLP is the leading independent global property consultancy.
Headquartered in London, Knight Frank and its New York-based global partner,
Newmark Knight Frank, operate from 207 offices, in 43 countries, across
six continents. More than 6,340 professionals handle in excess of US$886
billion (£594 billion) worth of commercial, agricultural and residential
real estate annually, advising clients ranging from individual owners and
buyers to major developers, investors and corporate tenants. For further
information about the Company, please visit www.knightfrank.com.
---------------------------------------------------------
Date: 13 September 2009
Knight Frank announces £20.8m profit
London, UK – Knight
Frank LLP (“Knight Frank”), the leading independent global residential
and commercial property consultancy, today announced its final results for
the year ended 30 April 2009.
more
Date: 29 August 2009
Prime London prices rise for fifth month leading to sales volume
boom
Knight Frank Prime Central London Residential Index – August 2009 results
Key highlights:
• Residential prices in prime central London rose by 1%, the fifth monthly
rise
• Sales volumes up 90% compared to January 2008
• Houses continue to out perform flats
• Chelsea, Kensington and Chelsea are leading the way
more
No: 09pr059
Date: 11 February 2009
Knight Frank’s Munich office letting and investment market
research
Munich, Germany The Munich office
market saw office space let in 2008 total 775,000 sq m and the letting
volume was 6.5 per cent lower than the year before (2007: 830,000 sq m),
according to global property consultancy Knight Frank. Owner-occupiers
accounted for about 55,000 sq m of the letting volume in 2008 (2007: 130,000
sq m). more
No:
08pr873
Date: 7 December 2008
Knight Frank
remains robust
London,
UK – Knight
Frank LLP (“Knight Frank”), the leading independent global
property consultancy, today announced its final results for the year
ended 30 April 2008. more detail
No:
08pr858
Date: 19th November 2008
Download: Bedford Square,WC1
Georgian splendour in
the heart of Bloomsbury
52 Bedford Square, WC1 is a restored, Grade 1 listed Georgian townhouse
situated on the only architecturally intact Georgian Square in London.
Currently this
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Date: 22 October 2008
Knight Frank
sets up new Netherlands association
London, UK - Knight Frank has set up an association
with NL real estate, an independent commercial property consultancy based
in Amsterdam, Netherlands. NL
real estate was founded in 2006 by three business partners Fred Rikken,
Siem-Jan Vos and Serge
Wuts who have extensive experience gained at leading real estate consultancy
companies. more
Date:
20 October 2008
London
remains most expensive European city to rent commercial property
London, UK - London remains the most expensive European city to rent
prime office, distribution and shopping centre space, according to Knight Frank's
latest European Market Indicators bulletin which covers 21 key European cities.
more
No:
08pr726
Date: 23 September 2008
Prime
International Residential Index Q2 2008
The prime residential market is weakening across the world – due
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in western markets more
No:
08pr703
Date: 12 September 2008
Knight
Frank opens in The Gulf -
Knight Frank has established a permanent Gulf network in the Middle East
and has appointed Don Bradley, who until recently was ceo of Cluttons in
the Middle East, as the region’s chief executive.
more
London, 10 September
2008 - The
new Snowmass, Colorado
Think North American ski resorts and Aspen immediately springs
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London, 2
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London, 15 July 2008 – Citi today announced that they have selected
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across Europe, the Middle East and Africa (EMEA).more
London, 22
May 2008 , Knight
Frank has opened a full service office in Cambodia, South
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KF opens Cambodia office | About Knight Frank Cambodia
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