Recovery slowing in London's commercial property market

Guestimate: Toby Courtauld expects London’s commercial property values to be flat to marginally up over the next six months

11 April 2012

Momentum in London's commercial property market is slowing after a blistering recovery since last autumn.

West End landlord Great Portland Estates today said the value of its portfolio rose by 4.6% to £1.44 billion in the three months to the end of June.

That was slower than the 6.7% rise seen in the previous quarter and the 7.9% during the final three months of 2009. Prices are up 25% in the last 12 months.

The company's chief executive Toby Courtauld said: "London's property investment markets have continued to recover during the quarter although at a lesser pace than the unsustainably high rates of the previous two quarters.

"Our best guestimate' is for values to be flat to marginally up in the next six months. There are general economic risks relating to a double-dip recession and further banking crises. That's the potential storm cloud on the horizon."

Rents rose 2.3% in the quarter compared with a 3.1% rise during the previous three-month period.

They rose 2.5% in the West End office portfolio and 1.8% in West End shops and City and Southwark offices.

Net asset value per share — a key measure of strength for the property industry — rose 4.2% to 295p.