City of London Commercial Property Market Strength Defies Brexit Fears
The City of London’s commercial property market appears to have missed the memo that tenants are set to flee in the face of Brexit, leaving an expensive ghost town of high-rise glass and steel in their wake. Investment properties at the heart of the UK capital’s financial and business district shouldn’t, on the basis of news coming out of the Brexit machine that companies are set to relocate en-
Last month an auction took place
Despite the fact that in a few years, when Brexit’s negative influence on the UK economy could reasonably be expected to be at or near its lowest point, a new tenant or tenants will have to be found and the building refurbished, the building is still clearly considered an attractive commercial property. And it’s not an isolated case. Last year was the strongest in five for commercial property deals involving
And it’s not just the acquisition of commercial investment properties in prime City of London locations that is a market defying Brexit
One factor that is helping to keep demand from both commercial property investors and tenants robust within the context of the market is that supply is relatively tight. Since even before the financial crisis a decade ago developers have been cautious when it comes to new construction. Rather than investing in the huge expense of building new commercial properties in London’s prime business districts and accepting the risk around how quickly new property can be tenanted, developers have sat on land and started to build only when a lease contract with an anchor tenant is already in place.
This, and the success of new flexible workspace models such as that of co-working giant WeWork which have been taking on building vacated by big corporate tenants moving to a new building, has kept the prime commercial property market in London buoyant. Savills’ figure of an average rent of £80 per sq.
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