The Central London office market outlook remains positive despite increased exposure to external ‘pollutants’. The London economy and real estate market have performed extremely well, outperforming the UK as a whole, as well as many other global markets. However, global economic sentiment has been dented the UK economy looks set to lose some momentum as external weaknesses increase.
Following a sustained period of above trend performance London’s economic growth was always set to moderate somewhat. However, with the ‘brexit’ question and uncertainty over the UK’s continued membership of the EU, London’s exposure to financial services means could see a demand side impact if the UK were to leave.
London is also more exposed to a global slowdown than any other UK region and weakness in the economy could affect the prospects for further growth in officebased employment; the main driver of occupier demand and a key component for rental growth prospects.
Source : BNP Paribas Real Estate