Rents at Heathrow have fallen for the first time in six years, despite the fact that the average Grade A rental value of £11.17 per sq ft in the region did not change, according to Jones Lang LaSalle’s latestWestern Corridor Industrial/WarehouseMarket Report. However, there was a two per cent rise in rents seen in Park Royal and Greenford last year narrowing the gap between Park Royal and Heathrow to just 50p per sq ft.
Heathrow, which still attracted the highest rental values, saw a four per cent fall in rents in the same period, led by pro-active landlords responding to the level of competing Grade A supply.
Bridget Outtrimsaid: “The dominant investors around Heathrow, who have so often led change, have once again reacted to the zeitgeist by reducing asking rents on vacant Grade A stock for the first time in six years.Where they go, others will undoubtedly follow.”
Looking forward into 2009, Jones Lang LaSalle expects vacancy rates, which remained broadly unchanged last year at 7.3 per cent, to rise as businesses retrench and it seems inevitable that there will be some further decline in rents.