West End activity continued the trend of recovery established in previous quarters.
For Q2 2010, Knight Frank cautions that the UK General Election will probably lead to a brief slowdown in activity, as market participants wait for the period of political uncertainty to pass.
If the incoming (or re-elected) government fails to convincingly address the issue of the budget deficit, Knight Frank anticipates that the slowdown period would last longer, possibly into Q3.
However, by Q4 at the latest Knight Frank expects the office market to resume its recovery, as the new global economic cycle gathers momentum.
James Roberts, head of Central London research, Knight Frank said: “The last nine months have seen an encouraging level of activity in the London office market. In particular, Asia-Pacific financial firms have been expanding, reminding us that London is a global marketplace. The upcoming election will dampen demand in the next three to six months, but that is just near-term political turbulence. Rather like the ‘Baghdad Bounce’ of 2003 for equities, I see activity coming back once the political uncertainty is removed, as there is a head of steam behind demand.”
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