Office and retail rents in central London are expected to grow by 3.5% and 5% per year respectively, according to Henderson Property.
Tourist spending, strengthened by the 2012 London Olympics and global exposure, will contribute to strong growth in central London, with retail rents rising by 3.5% pa on average over the next five years.
Angela Keane, associate director of research, property at Henderson Global Investors, said: “London landlords are reaping the benefits of both buoyant retailer demand and the distinct lack of space capable of meeting retailer requirements. As a result, even off-prime locations within the central London area are feeling the benefit.”
Outside the capital, retail rents are expected to increase by 1.8% pa.
Rental growth of 5% pa in the offices sector has been forecast over the next five years, owing to an expected rise in new jobs, as well as continuing foreign investment.
joanna.bourke@estatesgazette.com
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