Time to move offices in London

A recent article in FM World reports:

Prime rents in London will fall by a quarter this year, faster than anywhere else in Western Europe, if the latest forecasts prove correct.

The Investment Property Forum’s European Consensus Forecast anticipates a fall of 26.6 per cent in West End rents and 22.7 per cent in the City of London. The IPF Consensus Forecast collates predictions from a number of different property analysts to provide aggregate forecasts for the current year and the next four years.

All 29 European centres covered are expected to decline in 2009, but only Moscow (-30.8 per cent) is expected to see a steeper decline than London. A number of other centres have forecast falls in single figures including Vienna (-7.0 per cent), Berlin (-7.9 per cent) and Amsterdam (-8.8 per cent).

The long-term picture is also bleak. All 29 centres are expected to decline again in 2010, with London continuing to show some of the sharpest falls. Prime City of London rents are expected to drop by 12.1 per cent and West End rents by 10.4 per cent. The report states: “Six months ago London, Madrid, Barcelona and Dublin were forecast the poorest performance for 2010.  These centres have retained this ranking six months on and have suffered more severe further reductions in rental forecasts than the other cities reported.  Prime office markets in these locations are clearly under severe pressure.”

The survey did show, however, that analysts expect 2009 to mark the bottom of the market. Although rents are forecast to fall further in 2010, the pace of decline is expected to slow.

Recovery is predicted to begin in 2011 with West End rents strengthening by 1.3 per cent and City of London rents static. However the IPF data also suggests a long-term dislocation with rents in 2013 around 4 per cent lower than at the start of 2009.

This certainly bodes well if you are moving office and wish to upgrade your location.  Just as the plummet in house prices has allowed many people to move up the ladder, the same applies to office moves.