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UK Commercial Rents Rose as London Remains a Technology Centre

By Chandler's Watch / Published on Thursday, 15 Feb 2018 14:03 PM / Comments Off on UK Commercial Rents Rose as London Remains a Technology Centre / 87 views

London skyline at duskLondon’s status as a prevailing technology hub in the world will likely support a continual growth in prime commercial property rents in the U.K.

CBRE’s Prime Rent and Yield Monitor report showed that rental values in the commercial sector rose 3.1 per cent in the fourth quarter of 2017 year over year. As London continues to attract more foreign investments in technology, prime rental growth in the real estate segment will be one of the indirect benefits.

Commercial Real Estate

The CBRE report based its findings from five sectors of the commercial real estate. Only prime rents for retail warehouses suffered a year-over-year decline at 0.4 per cent, while industrial properties notched the biggest annual growth at 10.4 per cent.

Shops ranked second after registering a 2.7 per cent increase in prime rents, followed by a 1.4 per cent growth in shopping centre rents. Prime office rents also rose 0.7 per cent, according to the report. While non-residential rental growth seemed strong, some landlords need to be selective of their tenants. A commercial lease forfeiture will be necessary in certain cases, so you should know some companies that offer them.

Technology Centre

Liam Fox, UK Secretary of State for International Trade, believes that London will continue to attract foreign investments in technology centres, which may further support growth in demand for commercial real estate.

The capital serves as the location for 58,000 technology companies, according to Fox. For this reason, offshore investments in the city surpass Paris and Berlin by three times and nearly four times more, respectively. London’s Silicon Roundabout also helped in luring more venture capital investors than the combined investments in France, Germany, Ireland and Spain.

Conclusion

Commercial rents in the U.K. may continue to increase in 2018, so landlords need to think of how to take advantage of this trend.