London market recovers

The central London commercial property market began to recover significantly in 2010, with rental values rocketing and demand for grade A space far outstripping supply, figures from Capita Symonds’ real estate division shows.

The upbeat assessment comes despite a gloomy forth quarter which ended with a sharp fall in take-up of offices across central London markets and saw little movement in rents. Rental values across the capital climbed 14 percent last year.

Headline values in the City increased 25 percent from £42.50 a sq ft in December 2009 to £53.00 a sq ft a year later. Headline rental values in Docklands rocketed 33 percent from £30 a sq ft to £40 a sq ft, back to December 2008 levels.

Take-up rates last year increased across London by 37 percent but fell 41 percent in the fourth quarter on the previous quarter. The problem was particularly severe in the City where take-up rates fell 74 percent in the last three months of the year compared with growth of 42 percent across the year as a whole.