West End blues

12 August 2008 By George Hay Follow @gfhay

London s West End should have the safest commercial property in the country. But even here a double dip is under way falling rents are now joining falling prices caused by the recent property boom unwinding. How bad it gets will be a pointer for the rest of the UK.

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Rents in London's West End fell 0.9% in the second quarter, according to the Investment Property Databank – the first fall since Q4 2003.

The Investment Property Forum's most recent consensus of property advisors, fund managers and equity analysts estimates rents across the West End could grow 2.1% in 2008, fall 1.8% in 2009 and gain 0.6% in 2010 – total growth of 1.7%.

By contrast, Capital Economics predicts rents in the West End will fall 5% by the end of 2008, 15% in 2009 and 5% in 2010. HSBC analysts also estimate rents in the area will fall 20% by 2010.

Research published on 13 August by Lehman Brothers forecasts total rent falls of 2%.

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