According to property development firm Shaftesbury, demand for both residential and commercial property in the West End has reached unprecedented levels. As a result vacancy rates are low and rental prices have risen dramatically.
Shaftesbury owns more than 560 restaurants, bars, cafes and shops in the West End, but is struggling to add to its portfolio because owners are currently unwilling to sell. So far this year, the company’s total acquisitions amount to only £22.9 million.
In its latest trading update, Shaftesbury said; “London continues to attract unprecedented levels of interest from across the world from businesses choosing to locate and invest here, from visitors seeking to experience its unrivalled variety of attractions and from those who live and work here.”
Of course, while this is good news for landlords, there is an increasing worry regarding available commercial space. Should multi-national companies continue to increase their footprint in the capital, domestic SMEs may struggle to cope with rising rental charges and in turn be priced out of key areas.
Shaftesbury has only 3.8 per cent of its commercial portfolio left to let at a total value of around £3.2 million. However, as £2 million is currently under offer, the firm urgently needs to acquire more property in order to take advantage of London’s popularity.
With a redevelopment project in Carnaby Street underway, promising retail and office space along with a new restaurant and 12 individual apartments, it is hoped that the firm will be able to offer its services to businesses from around the world.
However, with available space in the capital beginning to run low and not a lot on the table for developers to snap up, perhaps the hidden side of this property boom is the difficulties it could end up causing for domestic companies.
Do you think a certain amount of space in London should be set aside for SME use, or should attracting further international investment be considered of higher importance for the overall economy?
