Prime London office rents in the City and West End could plummet this year as companies rethink their property needs, according to analysts at RBC Capital Markets.
The team, led by Julian Livingston-Booth, expects prime City office rents to fall by 23% this year and rise by 11% in 2021. West End rents will drop 27% this year and rise 8% next, they add.
“Such declines are consistent with the historical relationship with UK GDP growth, but also reflect our view occupiers will take time to reconsider their office needs,” RBC’s note said.
“Anecdotes from banks, including Barclays ‘re-evaluating how much office space it needs’, appear supportive.”
The team added that a 27% decline in prime West End rents compares to a 32% drop between June 2008 and March 2009, and a 41% fall overall during the financial crisis.
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