The latest Global Cities Survey from the London Property Alliance has shown that London fared better in commercial rents, foreign direct investment and employment in the second quarter of this year than competing cities Paris, Berlin, New York and Hong Kong.
The research, undertaken by the Centre for London, saw a rise in prime office rents in the City and West End markets during Q2, as employers invested in greener workspaces to deliver on environmental objectives. During the quarter the capital picked up more investment projects from foreign investors than any other city.
Both the West End and City submarkets saw double digit growth in rents for grade-A office space in Q2 (14.6% and 11.2% respectively), despite persistent levels of working from home. But office vacancies in Central London rose to their highest levels since Q1 2020.
The statistics showed that the capital’s employment levels are tracking 3% higher than 2019 and that it has the lowest level of unemployment of the surveyed cities, with Berlin suffering with the highest unemployment figures. However, London’s unemployment rate is the second highest of any UK region.
Chief economic advisor to the LPA Alexander Jan said: “In the second quarter of 2022, London continued to show positive trends, leading the UK’s economy in its post-pandemic recovery.”
However, he also stressed that “caution should be noted” in the ongoing strength of London’s recovery due to the challenges posed by economic and political uncertainty. He said: “There are headwinds globally facing London and other world cities. These may well manifest themselves in the results of our next quarterly survey.”
Jan also said that London needed “incentives from employers to attract workers back into the City and Westminster”.
“We need to support initiatives such as the City of London’s Destination City campaign and continue to champion the opportunities the Elizabeth line is unlocking for the capital,” he said.
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