Back in July 2016, days after the EU referendum (and personally, I think there will be another in 2019!), I made 6 bold immediate Brexit predictions for the London office market:
- More office space will become available to rent
- Tenants won’t move unless they have to
- Rents will stop rising and start falling
- We will help tenants negotiate much better commercial deals
- Tenants with rent reviews (and lease renewals) will feel that Christmas has come early!
- In a period of uncertainty there will be more demand for flexible lease terms and for serviced office space.
Of course, no-one likes a smug office agent. (Some people don’t like agents much at all – our popularity usually ranks alongside going to the dentist!)
Having said that, all my Brexit predictions have been proven largely right! But perhaps only up to a point. On balance, it is fair to say the economic impact of leaving the EU has definitely not been acute. Up to now…
And Brexit predictions for 2019…?
I’m writing this blog on a cold winter’s afternoon in early January, staring into the potential abyss of 2019. Quite how Brexit plays out will have a much stronger impact on the London office market. Furthermore, I know that landlords are already paying a significant price.
Quite how Brexit plays out will have a much stronger impact on the London office market. Furthermore, I know that landlords are already paying a significant price.
Until a satisfactory resolution comes to pass, I think all the above Brexit predictions I made back in July 2016 will continue – but to a much greater degree. Even if headline rents remain relatively high (see our latest London office rental guide for Q4 2018), below the surface of completed deals, tenants with good advice are benefitting from very generous letting incentives.
We are currently working on a flurry of deals across London in prime locations: Berners Street, Great Portland St (both north of Oxford St), Kings Cross and Farringdon. For all of these deals, we are helping tenants negotiate significantly better incentive packages than were available on the same properties when they were last let 3-5 years ago. This is very indicative of the current state of the office market.
One final Brexit prediction
During this time of heightened economic uncertainty, I expect a larger supply of amazing creative office space to come to the market. And we look forward to helping more and more tenants select “the perfect one” and going on to negotiate great commercial terms.