Day one of the new Coalition Government and things look positive. Gilts have gone up and the FTSE top 100 index has risen 50 points. Journalists are having to look further afield for stories. 2 news items that cought my eye were “Lebanon claims new hummus record” and even better, “Turkey nude hotel plan hits hitch”…
Down to earth and the Central London office market, which is pretty dependent on the wider economy and financial markets, seems pretty robust. There is a general perception that rents bottomed out in the last quarter of 2009 (perhaps more so in the West End than further east) and much of Central London will see modest rental increases by the end of 2010. Coming out of a downturn, it takes a while for rents to actually go up because the first thing to happen is for rent free incentives to reduce. One of our clients – themselves a property company, taking space by Hanover Square, told me that they see now as a good time to lock into a 5 year lease at today’s rent…
Another client is about to sign a 5 year lease on newly refurbished air conditioned office space in Drury Lane, Covent Garden. The rent we agreed is half what the landlords were originally quoting when the refurbishment was completed 2 years ago, but still the same as a tenant would have had to pay 6 months ago. We managed to negotiate a 6 month initial rent free period, but a short while ago ago the rent free would have been closer to 12 months.
Today we saw an unpleasant sign of gazzumping! We are still trying to sort it out. We generally find that although we negotiate hard to obtain the best commercial deals for tenants, landlords and their letting agents try not to upset us because it is our clients who ultimately end up renting alot of their buildings. Lets see what tomorrow brings.
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