London and South East offices bounce back in March. After a weaker start to 2015 All Property showed higher returns in March. Total return for all UK commercial property was 1.2% in March, driven by strong capital value growth of 0.8% over the month. Offices in Central London and Outer London/M25 saw particularly strong capital value growth. The rate of growth in the Rest of UK was stable at 0.7% for the month. High street shops are seeing an interesting pattern of polarization.
The wider London market continued its gradual calming from the highs of summer 2014 Within this more sustainable growth environment we are happy to report strong demand for properties across our patch from both buyers and tenants
With parliament dissolved on 30 March, electioneering stepped up a gear and the 2015 general election campaign is officially underway. Sentiment seems to still be favouring a minority government after 7 May, although polls in recent weeks have recorded a shift towards the three main parties at the expense of support for the smaller parties.
2014 was the strongest year for occupier activity since the downturn in all the regional cities. Bristol and Manchester, in particular, were well ahead of long-term average, buoyed by deals on both large units and growth in activity amongst SMEs. Take-up was lower in the South East, but given the amount of space under offer, and lease event driven requirements, we expect 2015 to show a marked improvement. The occupier recovery has also led to growing interest from investors, pushing yields lower during the year. It has also triggered a new wave of speculative development. All the big cities now have some speculative office development underway – the first time in almost a decade that this has happened.