London Offices Struggle to Find Tenants

The Walbrook building is an office located in the heart of Central London, situated less than 200 metres from the Bank of England. Despite its location and having been designed by Norman Foster’s firm, the office building continues to be empty nearly two years after its completion.

Minerva, the owner of the Walbrook building, is not the only firm looking for tenants for their commercial property in the City. Approximately two thirds of the office space that has been completed in the area in 2011 has yet to be leased, despite the fact that the space created this year is 43 per cent lower than that of the normal ten-year average, according to a new report from Colliers International. Furthermore, Savills PLC says that new rentals fell by 52 per cent in the first six months of 2011.

Property companies such as Land Securities Group PLC and British Land PLC have restarted office projects in the City of London in 2011 and 2010, gambling that the rise in rents last year would continue into this year with the bounce back of the finance industry. The prospects of this have dimmed over the course of the last few months however, with the stalling economy in the United Kingdom and the financial crises in Europe having prompted many firms to delay office moves and cut jobs.

“The deterioration in the economic outlook since the summer has forced developers to reconsider the timing and feasibility of schemes,” admits CRBR Group Inc. executive director Digby Flower.

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