In response to my speculation about real rental growth in office markets, Steven Devaney at Reading sent me his data on real rental growth in City of London offices between 1867 and 1959. In real terms, rents grew sometimes and fell sometimes, especially during wars. Have a look below |(hopefully if you click on Rent Image you’ll be able to see a graph). Over the long term, there was very little change in real rental levels but there was a lot of change in between. Timing through luck or skill would have helped you a lot.
Obviously Steve has looked at this in depth in his published paper. To see more…
Devaney, S. (2010). Trends in office rents in the City of London: 1867–1959. Explorations in Economic History, 47(2), 198-212.
If interested in how real estate prices behave over the very long term, you could have a look at a fascinating (but quite techie) paper on house sale and rental price trends in Amsterdam over a 365 year period here.