The performance of London's various sub-markets continues to fluctuate. The City market, saw a sharp rise in take-up to 775,000 sf, boosted by two large lettings to Ofcom at Riverside House, Southwark and ICAP at 1-2 Broadgate. But the West End market saw a 20% fall in take-up against the previous quarter.
In the face of this sluggish letting market, rents are continuing to fall. The CB Hillier Parker Central London office rent index fell by 4.5% in the first quarter and is now down by around 12.5% year on year. And the agent says the London economy is not expected to support positive rental growth this year.
Nick Ridley, Senior Director at CB Hillier Parker, said: "The current low level of activity is significantly linked to poor business confidence levels with adverse pressure on companies from all sides. Business confidence will not bounce back until war is over in the Gulf and reconstruction well underway. Until this happens the stock markets will be bleak and until they start moving forward business will not be in a position to plan for non essential office moves."
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