The London offices market is set for further price falls as evidence emerges that big banks have put requirements for large new lettings on hold for up to a year and are opting for short-term flexible leases, according to research by MWB Business Exchanges. The Times.
Banks and financial services companies have taken up to 80% more flexible lease contracts between July and October than the third quarter a year ago, when the occupier market was healthy.
Previously it has been more usual for banks to sign up to ten to twenty-year leases. The average term for the short flexi-leases has doubled to about 18 months.
The change in leasing patterns suggests that big banks are concerned that they may have to make significant job cuts over the coming months.
A large loss of jobs would pull the rug from the offices occupier market in the capital, which would pull down the price of buildings.