Yesterday revealed news that there will be a huge change in the way companies pay Business Rates across the UK. The chancellor, George Osborne, announced that the UK’s entire business rates income will be held directly by local authorities; uniform business rates as we know them will be ended. The current scheme sees the entirety of business rates revenues held by the central government, currently around £26 billion annually, and then returned to local authorities through grants.

As autumn is now officially upon us the anticipation of Christmas is already on everybody’s minds, pop up Christmas shops are emerging and Christmas holiday plans are being made. The build up to Christmas in the commercial property industry is no different, everyone wants to move by Christmas, the rush is on.

Central London’s commercial market has seen vast rental growths over the last 18 months. There have been record rents achieved throughout the Capital, from Mayfair to The City. This has had an impact on tenants, specifically start-up companies that are looking to take space with scope to grow quickly. Landlords are demanding strong rent deposits and high rents, forcing many of these companies to look at alternative options to standard leased offices.

As development in the office sector bounces back the skyline is full of cranes for exciting new developments. As we all know land is minimal in London central so the only natural way to make more office space is too build up! The pro’s to having a vertical community in London is obvious, not having to walk outside in the often rainy city to get lunch, drop off your dry cleaning, or even to get your bike repaired is a very desirable idea to a lot of employees. 

CITIC Construction, the construction and engineering subsidiary of the CITIC Group, ranked among the largest 100 companies in the world with 44 subsidiary companies including China CITIC Bank, is looking to acquire a UK construction company to gain a foothold in the EU market. If the acquisition is successful it will allow CITIC Construction to bid for work, for example at Royal Albert Docks.

The Nestlé Tower in Croydon, otherwise known as St Georges House has been put up for sale off market, by Legal and General. They are in discussion with Delancey’s and Ares Property Partners’ Minerva who are hoping to develop the site – the likelihood is for an office to residential conversion. 

Vacancy levels in Hammersmith are low and it is becoming increasingly difficult for business to find space. Recently, the old Aircraft factory has started going through a full blown refurbishment and is on track to bring a great amount of needed stock to the market. The size of units range from 500 sq. ft. to 73,000 sq. ft. and are quoting £55 psft. Which would put it at the top end of the market for Hammersmith rental prices.

There are many factors which influence the returns of office space and the popular consensus is that they will continue to rise for 2015. Different pockets of London are effected different from the market and therefore have a different level of return. As the demand for the City grows and vacancy rates hit an all-time low the returns are expected to increase to 19.9%.

Central London has seen a surge in record breaking rents over the last 12-18 months. Core areas are in danger of overheating, is there any room for rents to continue to grow?