270: London property investment still hot, says Arlington

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Speculative development is picking up in the central London office sector, which is outperforming all other areas of the UK property market, but is not yet able to match demand, according to property investment management firm Arlington Securities.

However UK commercial property returns as a whole have slowed over the last six months. The total return for the IPD annual index over 2007 is projected to be 10% compared to the 2006 annual return figure of 17.9%.

Arlington UK fund of funds manager Richard Gale said: The surge in rental growth was initially led by the West End, but the City has also seen a sharp improvement in the last six months. However rental levels in the West End, when viewed in relation to City rental levels, remain almost as high as ever.

The sharp increase in rents in central London has been driven by increasingly fierce competition for available space. In the City, the major Grade A buildings available, Moor House, 99 Bishopsgate and the Gherkin have been mostly let. The few available Grade A schemes are experiencing substantial rental growth.

The Arlington UK Fund of Funds, which was launched in January 2007, allows investors to invest in a portfolio of balanced and specialist funds investing across the UK. The minimum investment is £100,000.

Source:

Citywire.co.uk