The City of London office leasing market is proving more resilient than the two previous market cycles, according to research from Knight Frank.
Indexing rents from the top of the past three cycles, the current market found a floor in rental pricing levels quicker than the previous two. Rental levels in the City are now above those of the fourth quarter of 2007. Over the same period of recovery, the previous two cycles, starting from the third quarter of 2001 and the fourth quarter of 1989, lag behind considerably.
Bradley Baker, central London tenant representation partner at Knight Frank, said: “These figures demonstrate that the City office market has proved far more resilient in recent years than anyone would have imagined back in 2007 when the financial crisis began. One of the keys to the City’s success has been its significant diversification away from an over-dependence on the financial sector in the past and instead embracing and attracting technology and media firms such as Saatchi & Saatchi, Amazon, Hachette and Uber.
“Unlike previous downturns, the current recovery began within two years of the initial crash and has been sustained for over five years. This compares favourably to the 2001/3 and 1989/91 crashes, which took over three and four years respectively to post a recovery, and even then they were short-lived.”
