With the ever increasing cost of commercial property in Central London, a trend of office occupiers within the capital moving out to other major cities will start happening over the next decade, according to new research by Lambert Smith Hampton.
LSH’s 2016 edition of the annual Office Market Report highlights the substantial differences to staff and housing costs in Central London and other key cities in the UK.
Cities like Bristol, Birmingham and Manchester, in a new-build office for staff and premises costs, which includes rent, business rates and day-to-day running costs, works out at over £50,000 per workstation. While a workstation in London’s Midtown area costs more than £80,000.
These figures mean that per year, a new-build office in a city such as Bristol for 500 staff, would cost £27m. In Midtown on the other hand, the total cost would be over £13m higher a year.
Commenting on the findings, national head of office agency at Lambert Smith Hampton, Tony Fisher, said: “The significant cost advantages offered by the UK’s core regional cities are such that we are starting to see a rebalancing of business activity away from London over the coming decade.”
He goes on to say that the differentials in occupational, housing and staff costs will start opening bosses eyes to “life outside of the M25”.
This could benefit the capital greatly, as Mr Fisher concluded: “This represents an opportunity to vent some of the pressure which is building within the capital. This could be a win-win for everyone.
“Alongside publically funded infrastructure investment, investors and developers will play an important role in turning the opportunity into a reality. New schemes in the core regional cities should be considered to suit the needs of both existing businesses as well as be targeted at progressive occupiers in the capital who may benefit from relocation.”
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