Difficult Year Ahead for Commercial Property Market

Approximately 14 million square feet of serviced office space in the United Kingdom is reaching a break clause or expiry of a lease, property agents Jones Lang LaSalle claim. These lease events could potentially be a threat to any possible recovery in the commercial property sector should firms decide to make use of the opportunity and downsize their operations in the United Kingdom.

In their office space predictions for 2012, Jones Lang LaSalle claim that there is as much as 6.2 million square feet of office space set to expire or break in London over the course of the next five years, with a further eight million square feet in the primary regional cities.

New office building developers in London have been targeting firms with lease events as possible tenants, because the workforce in the city is anticipated to remain flat. The importance of the lease events “cannot be overstated,” according to Jones Lang LaSalle, albeit warning that there is a “greater propensity to extend and restructure” leases among companies.

Organisations that are tipped to be on the lookout for new office space in London this year include the likes of LinkedIn, Saatchi & Saatchi and the new Prudential Regulatory Authority, although they are set to take up no more than 775,000 square feet, with Jones Lang LaSalle warning that the total take-up of office space across the United Kingdom will likely fall significantly below the ten year average.

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