London News & Search
More than a third of offices, factories and shops in London remain unlet six months after being launched on the market, a new survey reveals today.
It says these so called “zombie properties” are costing landlords hundreds of millions of pounds a year in lost rent. The figure was revealed by online commercial estate agent Virtual Commercial using data from the Zoopla portal.
Founder and chief executive Andrew Vertes said the market had seen a big fall in demand since Brexit with commercial rents in central London now falling back to levels not seen since the financial crash nearly a decade ago.
However, he said many agents were failing to adapt to the new market conditions, leading to thousands of properties languishing on the market.
He said: “Keeping a property on the market for a long time, at an unreasonably high price, allows the estate agent to inflate the local leasehold market which helps with acquiring new clients, negotiations with tenants on behalf of landlords and professional work such as rent reviews.
“In a bullish market this approach can work where demand keeps up with the supply. However, the current situation is that since Brexit commercial property demand has become more bearish.”
He said a good example of a “zombie property” was the office block Westlink House — also known as the Pyrene Building — on the Great West Road, Brentford, which was first listed in June 2016 and has carries a rent of almost £1 million a year.
Mr Vertes added: “Brexit is probably the cause, confidence has definitely been dented by it all. We went through a crazy period for commercial property when appetite was insatiable. Now there’s a big question mark where there is going to be continued demand. Since Brexit we’ve definitely seen the number of vacant properties increase.”
The problem is even worse outside the capital. Across England and Wales most large cities have zombie property rates of more than 50 per cent and in some cases more than 60 per cent.
Newcastle is the worst with 66.2 per cent of commercial properties not disposed of after six months on the market.
London News & Search