Merger-mania could threaten the long-term level of demand for offices in the City of London, warns Healey & Baker in its latest Quarterly Market Report.
H&B warns that demand for space in the City of London could suffer from the wave of takeovers and mergers in the financial sector. The report also warns that demand will fall as the economy slows despite a positive outlook in the short term.
Increasing acceptance by occupiers that they need to take larger units than they actually need is a trend which the central London markets share with the regions. “Aside from allowing them more control over the property, this also gives occupiers more freedom to plan for future expansion,” comments H&B.
Overall, it notes that the most prominent factors in UK markets this year are strong tenant demand, limited quality availability and few signs of speculative development.
Demand is growing fastest for prime high street retail locations and retail warehousing parks with open consent. Offices and business parks in London and the South East, as well as industrial sites in good locations, are also popular.
The report predicts that the emergence of new investors both nationally and internationally could lead to more development. But H&B warns that continuing economic turmoil in the Far East could still affect trade, inward investment and jobs in the financial markets in Europe.
EGi News 11/02/98
