Is Midtown getting closer to the City?

In the past two years, Midtown office capital values have experienced a significant decline, mirroring the trend observed in the City, as valuation yields returned closer to those of the eastern rather than the western neighbour. Such a move seems harsh considering that Midtown rental values, as reported by MSCI, actually exceeded the growth of both its neighbours in each of the last three years.

Looking ahead, our forecast indicates a narrowing of the yield gap between the West End and Midtown in the upcoming quarters, with Midtown poised to outperform its West End counterpart. However, this projection could be jeopardized if higher capital expenditure is necessary to meet environmental standards in Midtown compared to its neighbours – although current data does not indicate that investors are facing increased spending on their assets.

For more information about the RES Forecasting Service please email contact@realestatestrategies.co.uk