Signs of growth in City as Corporate lettings recover

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With rental budgets rising by 7% since the end of 2010, corporate demand for property to rent in London is continuing to show signs of resurgence - indicating a recovery in the capital’s economy, according to research by estate agent Marsh & Parsons.

London - 23th June 2011, With rental budgets rising by 7% since the end of 2010, corporate demand for property to rent in London is continuing to show signs of resurgence - indicating a recovery in the capital’s economy, according to research by estate agent Marsh & Parsons.

After the recession set in, companies' appetites to spend heavily on high-end prime property to lure staff to relocate to London 'fell off a cliff'. In the past 12 months, this trend has reversed, with greater demand being recorded for property to rent in Chelsea, property to rent in Mayfair and property to rent in Westminster, among other primary locations.

In the first quarter of the year, there were 10% more searches from relocation agents seeking to find homes for prime staff than a year ago – a 16% increase compared to Q1 2009.

Peter Rollings, CEO of Marsh & Parsons comments: "London’s economy is continuing to bounce back strongly, and this is reflected in the surge of business we are doing with City firms and their intermediaries. Relocation agents are typically an expensive outlay for organisations – used sparingly to find ideal prime property for very senior employees. It’s encouraging news that City firms have faith in London's economic revival and are once again commissioning them to entice the top business talent from across the globe."

As more companies commit greater resources to finding and renting prime rental properties to attract and relocate senior staff to London, the average budget for a mid market corporate let is rising. By the end of Q1 2011, it has risen to £747 per week - 14% higher than a year ago. If the corporate lettings market shows the same seasonal growth as it has done in the past two years, average rents are likely to hit £925 per week by the end of Q2 2011.

However, the most pronounced surge of activity in corporate lettings has been in searches for high-end properties with a rental value of more than £2,000 per week. In the first quarter of 2011, there was more than three times the number of searches in this category than a year ago.

Peter Rollings concludes: "The wider London rental market has been heating up for some time – but even this is being outpaced by the resurgence in demand for corporate rentals. The growing appetite from City firms for top of the range properties is being contrasted to the slow and steady supply of prime properties entering the rental market – and this is forcing rents northwards. Top of the tree bankers are still being drawn to property in Kensington and property in Notting Hill to enjoy the kudos of living in such an exclusive postcode. City companies are having to up their budgets to secure top-tier properties in such competitive markets."