London, alongside New York, Hong Kong, and Singapore, is a premier global financial centre. This vast urban area is the UK’s primary economic powerhouse, boasting one of Europe's most vibrant commercial property sectors. The West End, recognised for its blend of business and leisure, ranks as the priciest area for office rentals. Experts place London at the forefront of European cities in terms of development and investment opportunities.
Despite its status as a leading global real estate market, the commercial sector isn’t immune to turbulence in the wider property market. Over the past few years, London's office sector faced significant challenges due to the pandemic. Factors such as repeated lockdowns, travel bans, a shift towards remote working, and Brexit implications led to a downturn in investment and tenant interest. However, from the latter half of 2021, Central London's occupiers' market achieved unprecedented take-up levels. This surge, along with rental increases over the last 12 months after a period of stagnation or even a slight decline in 2021, signals a revival in the occupiers' market, and occupancy rates continue to grow in the West End as well as in the City of London.
Many residential landlords have been shifting their interest away from domestic properties and towards the commercial market, seeking to invest in office and shop properties for their greater security, longer leases and strong demand. Creating a mixed portfolio is seen as a wise financial move, and average yields for prime central London offices were at 6% at the end of 2023.
As well as helping clients find commercial properties to buy, the Winkworth Commercial property team can also connect buyers with a large number of commercial properties to let in and around London Zones 1 – 6. Local specialists work with both the landlord and retained occupiers and cover the market in considerable detail, delivering results and attractive lease terms that secure income and business prospects for the future. Their expertise extends into Development and Investment Consultancy, so anyone looking to set up or invest in a business premises in London could benefit from getting in touch.