The continued political instability in the UK is having a big impact on office leasing in the City of London. According to the latest data, the number of leases has slowed to a ten year low as many businesses delay important strategic decisions. Many of them are still waiting to see whether they will choose to move their operations elsewhere.
Although the level of activity has fallen the leases that are getting done have been reported as being at healthy rates. This means there hasn’t been a huge drop in values as a result of the instability. The delays are thought to be due to more businesses wanting to take time to make decisions.
One thing businesses need to consider is the cost of relocating their operations. London offers a wide range of amenities including a fantastic infrastructure with great transport links, access to schools, and a good quality of life. Not many other cities can offer all of this. Moving assets and staff could be very expensive and has the potential to cause delays to operations. Many businesses want to avoid both of these things.
The news for commercial properties in the City of London in 2017 has not been all bad though. In the third quarter of the year Brookfield made their decision to sell their stake in 20 Fenchurch Street (the Walkie Talkie tower). With a 3.5% capitalisation rate this became one of the highest sale prices ever recorded in the district.
There is definitely some uncertainty but the area retains value. If businesses start to commit to staying it would cause prices to rise.
At Finefair we provide flexible services throughout the district. Particularly we specialise in providing block management City of London investors can trust in. We can effectively manage portfolios of various sizes. With our help you can enjoy high standards and save money at the same time.
To find out more about block management please get in touch with our team. We are committed to delivering the best level of support we can, catering for the whole of the City of London.