C&W H&B publishes its Central London market watch for Quarter 1, 2005 (UK)

Cushman & Wakefield Healey & Baker has published its Central London market watch for Quarter 1, 2005. For 2005 C&W H&B is expecting the supply to go down and the demand to stay remain the same. Take up is also expected to remain on the same level and rents should go up slightly.

Quarter 1 figures:

Supply led recovery continues

Despite limited levels of activity, supply dropped to 23.2 million sq.ft, the lowest point since Q2 2004 when it stood at a record high of 27 million sq.ft. Correspondingly, the overall vacancy rate stands at 9.6%, the lowest level in two years.

Development pipeline remains limited
Supply remains limited largely due to the restrained levels of new stock being delivered to the market over the next two years. There is currently less than 3.5 million sq.ft of space under construction across Central London.

Take-up levels cooled off in Q1 2005 after a bullish finish to 2004
Take-up for Q1 2005 reached 1.55 million sq.ft, a strong result considering the lack of transactions over 100,000 sq.ft. Although subdued, such levels are an improvement over late 2002/early 2003 levels when the market was at the bottom of the cycle.

Rental growth expected on prime properties outside the Core
Rental growth is forecast for 2005, albeit not on a universal basis. We look for prime properties outside the core to continue capturing most of the upward pressure on rents. Growth is expected to become more broadly based over the course of 2005.

Improving corporate demand forecasted
Assuming that the key economic risks associated with corporate performance do not deteriorate, demand levels should improve as the London economy is expected to see growth in output and employment in 2005.

Investment market boosted by City volumes
Total investment in Central London offices reached £3.3 bn during Q1 2005, boosted by the City market which reached £2.62 bn against £5.49 bn for the whole of 2004.

Source: C&W H&B

Related News