London leads the way in market recovery

From the December issue: After a catastrophic slide in which building prices fell by more than 40 percent, London’s commercial real estate market seems to have hit its bottom. While New York commercial property is still searching for a floor and is expected to continue falling, in its rival and sister city across the Atlantic, things are looking up. Sale prices have started inching upward, prime-area rents are stabilizing, and new leases are increasing — albeit from a very low base and with vacancy rates still rising. It’s hardly a return to boom times, but market analysts say the third quarter of 2009 was the best since the financial crisis hit last fall. “We very much believe the bottom has been reached,” said James Young, head of Cushman & Wakefield’s office in London’s financial district. “We’re a lot more optimistic than perhaps some other markets around the world.” Eighteen months ago, Young said, many thought London would lose the prominence it shares with New York as a global financial center. Now, with the health of the banking sector improving, “that fear seems to have dissipated,” he said.