According to the latest research by estate agent JLL, 2.4 million square feet of commercial property was leased or bought in London during the first quarter of 2018. This is lower than the quarterly average during 2017, but ahead of the first quarter of 2017.
The West End had the strongest performance with take-up of 932,000 square feet. The City of London did well, but East London had below average take-up.
The JJL report forecast that commercial property supply could be a future issue with not enough to satisfy expected demand. New developments often have 70% pre-leased or let soon after completion.
Rents remain largely unchanged but are high at an average of £110 per square feet in the West End and £70 in the city.
Investment in London commercial property was £2.4 billion in the first quarter of 2018, which is significantly down on the £4.7 billion total in the same period of 2017. Of the total invested, 78% was by overseas investors.
New commercial property construction due to be completed in 2018 total 1.4 million square feet, which is 0.4 million square feet below a 10-year average. In 2019, a further 2.7 million square feet of new commercial property is expected to be completed.
Many investments are in very large schemes. There are some opportunities for small investors, and outside of London commercial property can be purchased at reasonable prices. There are many commercial mortgage deals available to finance commercial property investments in and outside of London.