London Update 23rd November 2011

In spite of prevailing economic uncertainty the London property market continues to show robust performance, although markets outside the prime south east remain fragile.

This disparity creates challenges for investors who are seeing investment prices continue to diverge from those in the occupier market. The lack of like-for-like transactions makes pricing more difficult, which is generating both risks and opportunities for future investment performance.

Other findings presented in the report include: the office sector is expected to continue outperforming other markets, but occupier demand is likely to remain cautious - even in Central London; retail yields and rents are expected to remain firm for better quality stock, while rents outside the capital and other prime locations are likely to fall in real terms over the next two years; and negative real rental growth is expected in the industrial sector during 2012 and 2013, albeit with better performance in and around London.