iNVEZZ Releases Analysis on the London's Commercial Property Market: London's Two-Speed Office Market

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Investors’ portal iNVEZZ has recently published an analysis taking a look at London’s commercial property market; by analysing the most recent trends and citing extracts from an official document, which examines the UK capital’s real estate market, the author of the editorial, Frank Quin, outlines that London comprises two office markets. The analysis looks into both of them and summarises the most important points of consideration for anyone interested in commercial property investment, London office market trends and future perspectives.

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There are vast acreages of abandoned and virtually unsalable office space all over the fringes that can’t be let at any price, because there are simply no commercial or public sector entities of any consequence wanting to set up shop there

After the market slump in 2008 following the global economic crisis, London commercial property is again attracting both domestic and foreign investment. Looking into these latest trends in the real estate market, investors’ portal iNVEZZ has published an analysis by Frank Quin, dissecting the UK capital’s commercial property market and examining its two territorial dimensions – Central London, which remains a strong office market and the rest of the city, where the pictures is “less rosy”.

Quin embarks on the conclusion that there are two London commercial property markets at the very beginning of his analysis. The editorial starts with quotations from the ‘London Office Property Review 2012’ (LOPR 12), prepared by Ramidus Consulting for the Greater London Authority and released in September, which includes observations on the London office market, pointing to the separation between ‘Central London’ and ‘Outer London’ markets.

After clarifying which areas fall into which category, Quin looks further into the respective trends and opportunities for commercial property investment. London’s central areas are increasingly attractive to investors and more upbeat in terms of investment conditions, the author outlines. He writes: “Notwithstanding widespread retrenchment in London’s financial sector since the Lehmann Bros collapse in 2008 ushered in the global credit crisis, commercial property in the centre – and especially office accommodation in the CAZ [Central Activities Zone] – has continued to climb in value, but with yields heading in the other direction. The apparent enigma is explicable by the city’s special status – attributed and nurtured over hundreds of years – as a ‘safe haven’ for capital in times of turmoil. And especially foreign capital, some of which has no other home to go to.”

Taking a comparative approach, Quin also looks into the Outer London commercial property market. While the City of London nears a supply glut of developed commercial property, London’s outer boroughs are full of empty, unused and unsalable office space. “If the LOPR 12 is to be given due weight, there are vast acreages of abandoned and virtually unsalable office space all over the fringes that can’t be let at any price, because there are simply no commercial or public sector entities of any consequence wanting to set up shop there,” the author of the iNVEZZ editorial writes. Backing his statement with particular examples, Quin tries to give a virtual description of the commercial property London’s outlying suburbs hold.

Moving on, Quin takes a look at some of the factors which are likely to impact the future conditions for commercial property investment. London’s office market’s future direction will be highly dependent on several key factors, which Quin identifies based on the previously-cited LOPR 12 document. He remarks that the prospect of major relocations, the enormous growth and demand for accommodation in the TMT (technology, media, telecoms) sector, as well as the various ‘mega-schemes’ around greater London will all influence the city’s commercial property market. Yet “underpinning all such factors is transport – the means by which other positives in a given part of a major city can be given expression, or suppressed, as the case may be.”

In conclusion, the author of the recently-released iNVEZZ analysis gives some helpful advice to potential property investors, narrowing his focus to the Central London and, especially, to the ‘Central Activities Zone’, as “it’s in this core of the city that prospects of attractive, or at least stable, returns on commercial property investment remain relatively intact,” Quin summarises.

To learn more about iNVEZZ, join, contribute your own professional or amateur expertise on the investment areas of your interest or engage with other investors or experts, please visit http://www.iNVEZZ.com.

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John Adam
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