News on 28 March 2001
There will be a decline in the rate of rental growth in the office sector, forecasts GVA Grimley. Research carried out by the company indicates that the rate of growth will fall from 11.7% (over the last 12 months) to 4.3% in an annual average over the next five years.
This is believed to be caused by the growth in central London, where most offices are situated. The research showed that London office rents had increased by 23% over the last 12 months – twice as much as the UK national average.
Commenting on the findings, Stuart Morley, head of research, said: “The present level of growth of prime office rents in London cannot continue in the face of the US economic downturn, the expected slowdown in employment growth and the high level of current rents. Although office rental growth is currently strong, a marked slowdown is forecast to occur later this year and in 2002.”
GVA Grimley predicts the industrial sector will suffer from the highest rental growth out of the retail, office and industrial sectors over the next five years, at 4% per year.
