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Corporate lettings recover
With rental budgets rising by 7 per cent since the end of 2010, the corporate lettings market is improving – indicating a recovery in London’s economy, according to research by estate agency Marsh & Parsons.
After the recession set in, companies’ appetites to spend heavily on high-end prime property to lure staff to relocate to London ‘fell off a cliff’. In the past 12 months, this trend has reversed. In the first quarter of the year, there were 10 per cent more searches from relocation agents seeking to find homes for prime staff than a year ago – a 16 per cent increase on Q1 2009. Peter Rollings (right), CEO of Marsh & Parsons told PROPERTYdrum, “London’s economy is continuing to bounce back and this is reflected in the surge of business we are doing with City firms and their intermediaries.”
As more companies commit greater resources to finding and renting prime rental properties to attract and relocate senior staff to London, the average budget for a mid market corporate let is rising. By the end of Q1 2011, it has risen to £747 per week – 14 per cent higher than a year ago. If the corporate lettings market shows the same seasonal growth as it has done in the past two years, average rents are likely to hit £925 per week by the end of Q2 2011.
The most pronounced surge has been in searches for high-end properties with a rents over £2,000 per week – three times the number of searches than a year ago. Peter concluded, “The wider London rental market has been heating up for some time – but even this is being outpaced by the resurgence in demand for corporate rentals. The growing appetite from City firms for top of the range properties is being contrasted to the slow and steady supply of prime properties entering the market – forcing rents up. Top of the tree bankers are still being
drawn to areas like Kensington and Notting Hill to enjoy the kudos of living in such an exclusive postcode – and it’s costing more.”