Savills detects stir of investor interest in London's West End

The increasingly attractive yield gap and above average long-term yields, currently standing at 5.75%, are already beginning to stir some investment activity in the West End, Savills has said in its latest Central London office review. The report predicts a rise in West End investor interest for smaller lot sizes offering medium to long-term secure income streams.

Paul Cockburn, director at Savills, comments: 'Whilst it is certainly far too early to call the end of the credit crunch, we do expect 2009 to see a pick up in demand within the West End office investment market. Whilst smaller lot sizes are predicted to be the most appealing to the domestic market, there are signs of strong overseas interest for larger lots.'

The research notes that take-up in the West End fell sharply in 2008 standing at 278,700 m². This is down on the long-term average of 315,860 m². The Professions and Insurance & Financial services sectors were quoted as the most active occupiers. Looking forward, the research forecasts that take-up in Central London will remain below average in 2009 and 2010, returning to average levels thereafter.