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South Bank Set For Mini Ice Age As Market Goes Cold

LONDON-London's South Bank--until recently seen as one of the UK capital's strongest emerging markets--is likely to be frozen out by occupiers and investors for at least two years according to new research from Cluttons. Prime rents have already fallen 25%.

By Graham Parker | Updated on January 28, 2002

LONDON-The slowdown in the London office market has halted the emergence of the South Bank area as a popular office location according to new research from Cluttons. Rents have slumped and the recovery will be slow in coming, the agent warned. The firm believes it may be 2004 before rental values starts to pick up again, long after prime central London rents have started to recover.

Cluttons warned that the South Bank had not been able to achieve a critical mass of new development before the market lost momentum and, consequently, the area is still regarded as a fringe location. As a result, the slowdown has hit the area hard and prime rents have fallen by 25% over the past nine months from £45 ($63) per sf in March 2001 to £33 ($47) per sf now. And Cluttons believe that a further fall of up to 15% is on the cards for 2002.

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