Approximately 11.9pc of City offices are vacant – equivalent to 10 large city towers – up by a tenth already in 2009 and more than double the 5.2pc prior to the onset of the credit crisis in 2007, as increasing numbers of businesses collapse or downsize.It is first time since 2004 that empty office space has breached the 10m sq ft mark, according to research by property agent NB Real Estate.
The slump is placing immense pressure on rents, which have now fallen 27pc in the past year from an average of £65 per sq ft to £47.50.
Increasing supply through the completion of new developments is hastening the fall in rents, although the situation is even more dire in the West End. The failure of a large number of hedge funds, many of which are based in the area, has pushed rents down 37.5pc to £75 per sq ft.
Alan Dornford, managing director of markets at NB Real Estate, said: "Sentiment-wise this has probably been the toughest quarter in the leasing market.
"Many landlords have been aggressively adjusting the rents they quote but in isolation this will not stimulate a recovery. A broader recovery relies on confidence returning to the employment market."
Source: Telegraph
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