Market uncertainty 'constraining office demand'

Office design news from Morgan Lovell

Published on 26-07-2010

Ongoing uncertainty in the office market has led to a constraining of demand in the UK, although rental growth remains strong, a new report has shown.

Detailed research carried out by CB Richard Ellis (CBRE) has highlighted the areas where rents are currently the most affordable - Manchester and Birmingham - while London, Heathrow is currently the most costly place in the UK to rent office interior space.

Ashley Hancox, head of regional office agency at CBRE, said: "The uncertain short-term economic outlook is continuing to restrain occupier demand, resulting in limited rental movements, albeit with stronger signals coming from London (City) market."

However, James Roberts, head of central London research at Knight Frank, recently stated that there is no call for alarm as a result of the recent cooling off of the marketplace, as this is likely to simply be a "breather", before it picks up again in the months ahead.

He argued that the last nine months have seen significant improvement in the market and it is inevitable that this would not last forever, although there will likely be a period of growth now the market has caught its breath.

Posted by Ian Johnson