James Whitmee

I am in Reykjavik in Iceland looking at the real estate investment market.

There is practically no evidence of any marketing going on of any of the principal developments. There is a huge office tower in the CBD which I visited which is almost entirely empty. I walked in, took a lift, visited a floor, took photos etc, but there was no-one to talk to about available space and no-one seemed curious as to what I was doing. Vacancy of offices, particularly, is not nearly as bad as I thought it would be. Although there is this large office tower I would estimate that within the main business area it cannot be running at more than 5-10%. Rents have dropped, however, since the pre-crash peak of Q1 2008 by 30-50%.

There is a huge amount going for the place in term of tourism. However, for all that its economy has crashed it is still incredibly expensive, London prices and more. A beer is around £5, and a pretty modest meal around £25. It costs £30 for a bus trip and entrance to the Blue Lagoon spa (near international airport) and an 8 hour tour of the volcano areas is £190. You can now get here cheaply and there are a lot of very interesting things to do, but I would say that it is definitely not a cheap holiday option, particularly for a family. At this time of year there is also the issue of the number of daylight hours, although in the summer it's the opposite of course. It's mild at the moment here, certainly warmer than the UK.

                                                                Cathedral in city centre

                                                     Reykjavik seafront from top of Hofdatun 2