London Commercial Property Rents Dip Further

Areas such as Canary Wharf that are at the heart of the financial services district in London have already experienced many sharp decreases in office rents.  Landlords are offering their once lucrative tenants decreased rents and better value inducements in order to keep their London commercial property occupancy levels up in an attempt to try to counteract the effects of the credit crunch. 

Investment banks and commercial banks have had a tough year and nothing demonstrates this more than the increasingly empty office spaces in the centre of London's financial district.  However, it can be argued that despite this it is the London hedge fund businesses that have been the most hard hit.  These once lucrative companies used to have their pick of swanky London commercial property but as the credit crunch has taken its toll their once plush and buzzing offices are being vacated at an alarming rate.  During the hedge fund sector boom the cost of London commercial property was of little importance to these businesses.  The high profitability that many of them enjoyed meant they were willing to front the cash and substantially outbid any rivals in order to get their staff into the right location and office space for their business.  Swanky areas such as London's Mayfair were buzzing with profitable hedge fund businesses that were willing to pay steep rents in order to be located in a prime London commercial property location.

However, the current economic downturn has hit these businesses hard.  The downturn has forced hedge fund businesses to either vacate their office space or renegotiate rents as part of a cost cutting exercise.  This has left landlords with little choice than to reduce their rents and increase their inducements or see their office space stand empty.  As a result leasing rates for swanky London commercial property offices in plush areas such as Mayfair and St Jame's declined by almost thirty percent last year.

It is not just the financial businesses in London that have been affected by the downturn.  Average rents fell by approximately 19% across London at the end of 2008 compared to the end of 2007, however, it is the financial areas that have been hardest hit with rents falling significantly below the average decreases.
Despite the hard ships currently bestowing London commercial property owners and investors the next few years are expected to bring some amazing UK property investment opportunities to cash rich buyers who will be able to take advantage of some great commercial property offers and deals.