West End Office Rental Values Achieve 10% Growth over the Year
Rental value growth over the quarter to November was 0.6% - an increase on the previous quarter's figure of 0.2%. This is due to higher growth rates in both the retail and office sectors. Over the 12 months to November, rental value growth was 2.3% - marginally below that of the expected rate of inflation (3.1%).
The retail sector managed to turn around a fall in rental values in the previous quarter to record a 0.5% increase. Rental value growth over the year was 1% - the same growth as in the year ending in the previous quarter. Central London has once again provided the greatest growth in rental values - 2.7% over the quarter and just over 9% during the last 12 months. Apart from Yorkshire and Humberside, Wales, West Midlands and the South East, all regions showed positive rental value growth over the quarter. Outside central London, Scotland recorded the greatest rental value growth.
The West End office market has seen rental values grow by over 10% during the 12 months to November. However, the office sector as a whole saw rental values rise by 4.4% over the year (the only sector expected to beat the rate of inflation). Yearly changes, with the exception of the South West, Wales and Scotland, were all positive, between 0.1% and 10.8%. Growth this quarter, despite being relatively low in London, the South East, West Midlands and the North, was at least double that in the previous quarter.
The only sector to experience an overall fall in rental values this quarter has been the industrial one. With the exception of the South East and Wales, all regions experienced either no change in rental values or very marginal decreases. Over the year, however, rental values were unchanged. During this period, Scotland experienced a fall in rental values of over 5%.
Rent Index - Current Prices