Organisations and individuals who have made commercial property investments
in West End offices
have enjoyed robust returns over the past few months.
Occupancy costs climbed in the West End by 12.5 per cent throughout 2011, the highest rise out of all the UK's regions, the new DTZ Global Occupancy Costs: Offices report has noted.
This increase can be attributed to an 11.7 per cent rally in rents, pushing this part of the capital into second place in DTZ's list of the most expensive office locations in the world. This position is predicted to be retained until 2016.
The occupancy costs for West End offices
are set to climb by 3.3 per cent over the next five years, while a 3.6 per cent hike is expected in the City, according to the study, now in its 15th year.
London is joined by Geneva, Tokyo, Zurich and Hong Kong in the list of the top five most expensive destinations in which to establish a base.
Other cities in Europe have not fared as well, with DTZ noting the eurozone debt crisis has taken its toll on the value of offices. For example, in the next two years, occupancy costs in Rome and Milan are expected to tumble.
During the final quarter of 2011, availability of West End offices
stood at 4.9 million sq ft, a decline from the previous quarter's 5.4 million sq ft, a recent Knight Frank report revealed.
Take-up stood at 1.3 million sq ft during the last three months of 2011. This figure was 1.4 million sq ft for the City, where availability came to 10.4 million sq ft. The number of City offices
was also significantly boosted by the ongoing construction of The Shard, the study added.
When fully completed in 2013, The Shard will deliver 25 levels of Grade A offices, with floor sizes starting at 14,500 sq ft.
Posted by David Hudek
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