New office premises in London are being offered to investors at attractive prices by companies in an effort to lure businesses back to the commercial property market . This has led to a rise in office letting, with landlords finding themselves striking more rental deals than expected. This is good news for the economy that has witnessed much fluctuation due to prevailing market instability.

UK property rental companies incurred heavy pre-tax losses due to the economic slump. With their capital values falling, rental companies decided to slash property prices as an emergency strategy to make profit. This plan has paid off, as potential tenants have again started showing interest in property deals involving offices to rent London.

A NB Real Estate research shows that businesses have taken an impressive 1.8m square feet of office space on lease during the first quarter of 2009 as opposed to 923,000 square feet before that. But at the same time, vacancies in the city have increased. The West End area saw 7.4pc to 8.4pc increase in vacancies, whereas the city witnessed a rise from 10.2 to 11.3pc in vacancies because new offices have entered the market in recent months.

However, despite new vacancies, accountancy firm BDO Stoy Hayward reports that investor returns are looking up. The returns at the beginning of 2009 were -5.27%, whereas now they are at -.9%. At present, commercial property business in the UK has the highest recorded investor interest in over a year.

With the commercial property market recovering due to more office space vacancies being filled up, rental companies may soon be able to raise prices on commercial spaces. This will fetch more profits for property owners and help the industry in general to move on to the second step of its business revitalizing exercise since the onset of recession.