For the latter, it includes a breakdown of rent, rates and service charges. For the former, these costs are all inclusive. Decision makers want to see the bottom line, so I have never understood why getting rates and service charge (as well as rent) estimates from agents can be so time consuming.
If you look at the guide, we try to alleviate the tedium by representing rent for quality office space in all kinds of formats: tables, charts and maps – whichever you find easiest to understand!
How is Brexit affecting the London office market?
Looking at the market itself, we have not detected any noticeable change in headline rents for good quality office space over the last quarter. There have been a couple of upward changes in the serviced sector for both Paddington and Knightsbridge. Aside from that, for conventionally leased space, it’s notably static.
Political and economic uncertainty is the enemy of decisive business activity. And Brexit is certainly providing that in spades. But is it fundamentally slowing the London office market?
That might seem counter-intuitive in the “will-we-ever-get-a-deal-done” Brexit environment. Look back over my previous rental analysis posts and you’ll see that rents have indeed flatlined in recent months. Nonetheless overall we are finding that many companies have become bored trying to work out the Brexit endgame. If they need a new office, they are more interested in securing space and simply getting on with business to the best of their ability.
Many companies are bored of trying to work out the Brexit end game. If they need a new office, they are more interested in securing space and simply getting on with business to the best of their ability
Landlords now offering to fit out space for tenants?
Putting rent to one side, I have noticed a development in the office market worth commenting on briefly. When landlords offer longer term leased space, they very often strip out all the internal partitioned offices, boardrooms, kitchens and break out areas. They can then offer a large empty space to new tenants! Once a new tenant leases the space, they have to fit it out again at vast expense.
This time last year, I was reporting that landlords were anxious and under increasing pressure in the current environment. Interestingly, we have recently seen some landlords adapting and innovating in response. Some are now offering to fit out an office according to a tenant’s requirements. The tenant can then move into a fitted office and get on with their business immediately, rather than undertake a disruptive 6 week building project. Tenants can design their own ideal layout and move into a turnkey solution. Although the rent increases accordingly, I think this development provides an interesting and useful option for some tenants.
Some Landlords are now offering to fit out an office according to a tenant’s requirements. The tenant can then move into a fitted office and get on with their business immediately, rather than undertake a disruptive 6 week building project.
I’m not “losing it”, honest!
Finally, my colleague Jamie made some rather painful comments about my “losing it” in his analysis of the serviced sector last quarter. Apparently I’m so preoccupied with senior citizen cyclists overtaking me on the way to work (only to find they were being propelled by electric motors), I’ve taken my eye of the London office rental market! I can assure you that nothing could be further from the truth. Howver, I have taken this on board and am googling “Find a London Cycle Therapist” right now 😉
I will let you know how I get on.