Market Commentary

The market remains steady with sales in good demand and lettings also moving reasonably quickly. Although there has been some growth in rents and capital values they have not seen the frenetic growth that some areas have experienced are and therefore less volatile. Capital values remain around £400 a square foot for quality conversions (on non international standard offices); rents vary from around £45 a square foot at More London Bridge through to generally around £25 per square foot in the Bermondsey Street area, but remain low at £12 to £17 a square foot outside of conventional office locations. There is a relative shortage of supply compared to demand, providing the economy remains stable there should be growth during the course of next year.

Industrial demands remain steady with a very limited supply of good modern properties and hence capital values exceeding £200 a square foot and rents of £14 a square foot for high tech units. The Glengal Business Centre development with around 90,000 square feet is now letting/selling well a few months after practical completion and estates such as the Bermondsey trading estate (which comprises 35 units) has minimal availability.

Demand remains good for units in reasonable positions and is particularly strong for A3 catering, A5 take away foods. Tesco's Metro are particularly aquisitive and betting shops cannot get enough space. Rents for lock-up shops in non prime positions are around £15,000 per annum or £30 per square foot rising to £70 if for prime space.

Following the expected traditional summer holiday lull, we have experienced increased activity throughout September and into October. Demand remains strong with both the new build and re sale markets performing well.

The development and regeneration of SE1 and wider Southbank continues apace and confidence in the area is high from both the investor and owner occupier sectors.
In addition, areas of activity worthy of note include : Elephant and Castle as the regeneration begins to pick up some real momentum. Deptford and New Cross which has seen significant investment now translating into reservations and Camberwell where some interesting large scale schemes are planned.
New build property prices for Bermondsey Street and Borough:

Rents in the Bermondsey area started to rise approximately 18 months ago. Landlords had started selling their buy to lets partly because yields were low, and also because many reckoned it was a good time to cash in. First time buyers were putting off buying because they either could not afford to buy or were concerned about rising interest rates and the danger of negative equity.

New build property rentals per week are approximately as follows:

For further information about the above please contact the following: