The scale and speed of the recovery in prime property values since the market nadir in the middle of 2009 has taken property investors by surprise, driven by the relatively high income yield, the perceived weakness of other asset classes, limited availability of stock and overseas interest fuelled by the weakness of Sterling.
This is best demonstrated by the boom in office lettings in London. More than 2m sq ft of office leasing deals were agreed in the first quarter of this year – the second highest total since records began in 1984 (source: CB Richard Ellis). 
Rents continue to rise (up 8% in the first quarter) against a backdrop of severe shortages in high quality properties as many big name firms are signing up for new headquarters. Banks refused to finance new developments during the credit crunch spelling good news for developers of new or soon to be completed buildings. Another factor is 15 and 25 year leases are coming to an end, triggering decisions to relocate.
If this type of activity is happening with our nearest neighbour is it only a matter of time before it spills over here??
- Steve Garavan
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