London office space rental costs predicted to rise

Brokerage J.P. Morgan has upgraded Great Portland Estates and Derwent London to "overweight" from "neutral," while raising its rental growth expectations for both firms. Analyst Tim Leckie commented: "By 2025 demand for London prime space could be 1.8 times that available, and prime vacancy will be close to zero, putting upward pressure on prime rent," noting that investor and government pressure to meet net zero goals are likely to see tenants reuse existing spaces, leading to a glut in supply. Leckie expects active demand for prime office space to grow 38% in 2030, but said supply would become tight from 2023, with the brokerage forecasting rentals increasing 10% per year.

Daily Mail