Jones Lang LaSalle (JLL) has forecasted that declining supply and not increasing demand will contribute to the resurrection of the regional office leasing markets outside London.
The new report from JLL’s ‘Office Market Conditions Across the UK’ expects shortages by 2012, owing to constricted supplies, thus reducing downward stress on rents.
Markets will recover in the same order in which they were affected. So, while markets like Birmingham which slumped first has already recovered, those like Edinburgh and Leeds will take time.
The Director of Agency and Development, JLL’s Edinburgh office, Cameron Stott stated that deals subject to covenants, lease lengths and the landlord’s financial position induce varying incentive levels. He revealed that prime rents had fallen significantly in Glasgow and Edinburgh in the final quarter. These markets are, however, seeing periods of consolidation now.
Head of JLL’s national offices team, England, James Finnis said that the public sector had supported the UK take-up outside London in 2009. However, as government looks at cutting costs, it is doubtful whether this trend will continue.
