UK - Euro-zone uncertainty has been weakening demand for office space in central London, according to Land Securities.
The UK's largest listed property company has warned that the crisis in Europe has made some occupiers reluctant to commit to new commercial space in the city.
The comments come at a time when a number of high-profile office developments are being constructed, including Land Securities' own 37-storey office development at 20 Fenchurch Street, dubbed the ‘Walkie Talkie'.
However, recently appointed CEO Robert Noel said limited development, coupled with significant numbers of lease expiries from next year, would mean supply constraints would continue for longer than forecast.
In the meantime, he said, Land Securities would rely on active management and "well-timed, well-located mixed-use development" in the West End to capitalise on continued, if more sluggish, demand for prime assets.
Land Securities, whose major shareholders include Dutch pension fund manager APG and the Norwegian Pension Fund Global, has in recent months slowed its acquisition of new assets, despite available capital from sales of income-producing assets.
"We remain of the view that patience will be required to find the right opportunities at the right price," said Noel.
"During the year, we identified very few attractively priced investment opportunities as investor demand for better quality assets remained good."
In separate news, property firm Grainger said political impetus supporting the private rented sector would create significant opportunities for built-to-rent initiatives in the UK market.
Posting half-year results, chairman Robin Goodhurst said the firm's resilience amid relatively flat house prices and low transaction volumes justified rebalancing of the firm's residential portfolio over the past three years to focus on economically active areas - London and the southeast.
Andy Cunningham, CEO at Grainger, forecast that house prices would only begin to show gradual but consistent improvement from 2013.
"Recovery will be earlier and more pronounced in those areas where there is the greatest economic activity and greater imbalance between housing supply and demand," he said.
