JLL: service sector fuelling demand for West End property

Jones Lang LaSalle's Q3 Central London Market Report published this week says that demand for space in London's West End rose 2% in the last three months.

Despite the impact of the credit crunch which has bitten particularly hard in the UK, demand is now 12% higher than at the end of last year. JSL says that the service sector is underpinning the market, accounting for 42% of overall demand in terms of floor space, against 17% for the banking and finance sector.

With over 102,000 m² let in the third quarter, the year to date figure for 2007 is now 60,000 m² ahead of the equivalent period last year. West End supply continues to tighten and there is enough demand in the market to justify further increases in prime rents to £115 per sq ft (EUR 1,786 per m2), or 28% over the last 12 months. With September being a very slow month for transactions, most of the investment activity in the West End occurred in July and August. Nevertheless, the quarter saw investment volumes of over £1.6 bn (EUR 2.3 bn) with the year to date figure standing at £5.05 bn (EUR 7.29 bn), compared with £6.07 bn (EUR 8.76 bn) for the whole of 2006.