Developer notes rising rental values as demand outstrips supply

London-focused office developer Derwent has said that space in the capital is being squeezed by low supply, higher rents, and strong demand.

In an interim management statement released this morning, it said that supply in central London fell for the seventh quarter in a row, and that there was 鈥渃ontinued rental growth鈥�.

This was particularly pronounced in the West End, it said, adding that this had helped push up capital values.

鈥淒espite strong investor demand, transaction volumes fell due to a lack of supply,鈥� it said.

It also announced the sale of five properties in Covent Garden for 拢68m to Capital and County Properties.

In addition, Derwent issued 拢175m worth of bonds to fund its development pipeline.

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