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London commercial rental values hit double-digit growth

Rental values in Central London’s booming office market grew by 10.3% in the year to October 2015, the first time annual growth has hit double digits since April 2008, according to the latest CBRE Monthly Index.

The capital saw 1.1% growth in October, as demand for office space continues to overwhelm limited availability.

Despite rapidly rising rents, take-up of offices in Central London continues to outpace the 10 year average. 3.6m sq ft of space was snapped up by businesses in the third quarter of 2015, with a further 3.8m sq ft currently under offer and expected to complete before the end of the year.

Office rents aren’t just rising rapidly in London. Rental values in the office sector grew by 1% across the UK last month, only the third time rents have grown this quickly since the financial crisis, and much faster than the 0.4% seen across commercial property as a whole.

Kevin McCauley, Head of Central London Research at CBRE said: “London’s office market has been heating up for some time now, but there is still strong business demand across the capital. Rental value growth has not been this sustained since before the financial crisis, and together with rapidly rising property values, landlords and investors are experiencing a booming market.

This was posted in Bdaily's Members' News section by Ellen Forster .