The UK is facing a very challenging economic climate but international property consultant King Sturge sees unprecedented opportunity in the office property market.
In its latest research report, “UK Office Property Market 2009” King Sturge points to a number of positives, including the outlook for UK regional centres. Rental reductions there are expected to be much less severe, with these cities continuing to enjoy a less volatile rental cycle than London and the South-East.
Jeremy Richards, Head of Regional Office Agency at King Sturge said: “For occupiers across the UK, this year offers the widest range of choice and the most attractive incentive packages for many years. Rents are lower than a year ago and in some cases it’s possible to obtain as much as 2 to 3 years rent-free.”
Mark Bourne, Head of London Office Agency added "The correction will be felt more greatly in central London than in the regions, having experienced a far greater growth cycle over the last 3-4 years."
In the capital, rental reductions of up to 50% are forecast over the next 2 years, but the City and West End markets are likely to be the first to emerge from the downswing next year. In addition, with office capital values having fallen by 35% since 2007, a shift in yields, the drop in interest rates and a weaker currency, the time is right for investors to consider assets, particularly in London.
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