Rents in the City of London could stop rising as a result of the turmoil on global financial markets, Hammerson warned yesterday. Financial Times. The Times
Office supply is tight, so tenants in central London are paying about 20% more for new space than they would have done a year ago, but this trend could start to reverse if banks become more cautious.
John Richards, chief executive of Hammerson, said: ’My gut feeling is that the short-term response to the conditions we have seen is that people will be less willing to pay more. That means the spike in rents will flatten off, we will not see so much growth in rents in the next year or two.’
Richards said this would stop many speculative developments going ahead in the City. ’What will change is that potential supply, a lot of projects people are talking about, will not take place. As a result there may perhaps be less volatility in the future.’
Hammerson has just applied for planning consent for the first, 1m sq ft stage of its 4.5m sq ft Bishop’s Quarter scheme to the north of Liverpool Street. The group is also rebuilding the old London Stock Exchange building.