Office Space prices set to fall

Those who invested in office space in the south-east at the height of the so called “property bubble” are facing losses in excess of 25%. These were the findings from research carried out by Knight Frank.

Property yields on office buildings in the City of London have increased from 4.25 % to 5.25% with West End of London yields rising from 4% to 4.75%. This illustrates a fall in prices of around 23% and 19%.

Despite being mere estimates, the research does give a broad indication of the direction that the commercial property sector is headed.

Central London office investments fell to £2.3bn in the first three months of 2007, down from £6 billion in Jul-Sept, and £6.4bn in Apr-Jun, according to data supplied by Cushman & Wakefield.

However falling prices, a side effect of the credit squeeze, means cash rich investors will be looking at deflated prices.

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