London Office Rent: Research in December 2013 by CBRE indicated London’s West End has unseated Hong Kong as the world’s most expensive office location, measured in terms of rent, business rates and service charge.
This dubious honour has been caused by
- increased demand from top flight financial tenants, who tend to pay the highest office rent in London
- A supply shortage, exacerbated by large scale change of use to residential
- Business rates, so high, they rival the cost of rent anywhere else in London
Updated London Office Rent Guide
As predicted, Find a London Office’s newly published Q4 rental guide shows headline London Office rent has risen by approximately 8% through 2013.
With 15 x £100.00 + lettings reported in Mayfair & St James’s there has been a continued migration north and east. A notable beneficiary has been Midtown aka Holborn, where clients of Find a London Office have just taken newly refurbished offices opposite Holborn tube on Kingsway at £48.50 per sq ft. This space would have let for £40.00 at the beginning of the year…
So how can tenants mitigate rising costs?
- More tenants will leave the West End Core in the pursuit of value for money elsewhere. This is achievable in London where tenants can obtain huge rental savings by moving further afield. And rent is not the only significant cost to watch. Business rates can be cut in half by moving from Mayfair to Marylebone, or from Soho to Waterloo & Southwark!
- Companies can reduce the amount of office space they occupy. This can be achieved by smart office design, going paperless and reducing desk size.
- One of our PR clients has reduced their office space needs 20% by allowing staff to work a day a week at home.
And what will 2014 bring? I confidently predict further London office rental increases across the board – at least 7.5%.