City centre rents set for strong 2015 | 24 December 2014
The majority of city centres will experience strong rental growth over the next 12 months, according to a new report from Frank Knight.
Rental growth is on the up thanks to increased occupier demand, which is being driven by the economic recovery. A lack of Grade A space has also boosted commercial property rents upwards over the past few years across almost every region in the UK, reports propertywire.com. Next year, Manchester, Aberdeen, Newcastle and Birmingham will see the strongest rental rises and every other city centre will see positive growth. Sheffield is the only exception, as it will not experience any increases in 2015.
Birmingham office rents will be the highest they’ve been next year, rising by eight per cent to reach £32 per sq ft.
By the end of 2015, rents for commercial properties in Manchester and Aberdeen will climb even higher to achieve record highs of £34 per sq ft – a rise of ten and six per cent respectively, reports costar.co.uk.
James Robert, Knight Frank’s chief economist, said although the next general election may have a slight negative impact on the commercial property market, the cuts made by the current government did not cause as much damage as some expected.
“A year ago one could only speak meaningfully of rental growth in central London, but in 2014 we saw it re-emerge for prime in many M25 towns, Birmingham, Glasgow and Leeds,” he said.
“The economic recovery has transmitted well to the wider UK in the last year. Consequently, we expect office rents to rise across the regional city centres in 2015, and lack of development to date could quickly migrate rental growth from prime to secondary.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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