Jones Lang LaSalle claims that refurbishing grade B office space can plug the supply gap in grade A space in the capital.
A major UK real estate agent claims there is a shortage of supply in grade A office space for
property investment firms in London, which urgently needs to be addressed.
As a lack of
commercial mortgage lending is still restricting development projects, Jones Lang LaSalle suggest there is ample opportunity for
commercial development firms to turn grade B office space into prime real estates.
This would plug the gap, as well as taking excess stock from the stagnant grade B market, the agent claims.
Dan Burn, head of City agency at the firm, said: "Upgrading grade B product to grade A standard seems a logical, relatively low risk opportunity to bridge this supply gap before new build developments reach completion.
"Grade A rents also look likely to outperform prime after 2012 in London as the differentials between the two narrow."
The commercial property market in London is continuing to show strong growth, according to property invest firm Shaftesbury plc, which recently announced profits of £122.7 million for the final six months of the last fiscal year.
Posted by Allan Flowers.
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