Record High Reached for London Office Space Costs

Posted on 20 June, 2016 by Chris Grigorovsky

New research from Lambert Smith Hampton has revealed the gap between London and regional office costs has reached record highs, which is set to push occupiers out of the capital.

London

The firm’s ‘Total Office Cost Survey (TOCS) 2016’ found the main cause for the situation is London’s traditional office districts and emerging business locations having strong rental growth.

However, regionally, rental growth seems to be making a return in the core cities, with rents in locations such as these usually remaining lower in real terms than the last peak in 2008.

In London’s Midtown district, occupying a new-build development is currently at a new high of £127 per sq ft per annum and 78% more than ones in the ‘big six’ cities.

Commenting on the findings, Head of Research at Lambert Smith Hampton, Oliver du Sautoy, said: “The strong rates of rental growth witnessed in some locations will put further pressure on occupier costs moving forward.

“Business rates liabilities in these areas may also rise sharply when the 2017 revaluation comes into effect, and it is quite plausible that sharp rate rises will contribute to a dampening of rental growth.”

He goes on to say that relocating out of the capital is “arguably as compelling as it’s ever been”, concluding: “The relative cost parity that once existed between Central London’s fringe locations and the UK’s core cities has vanished.

“With occupiers having to look further afield than the capital to reduce costs, the UK’s core cities are well-placed to benefit.”




Leave a Reply

Your email address will not be published. Required fields are marked *


Recent Posts

Aldi’s Expansion Plan

British Steel on the verge of collapse with over 20,000 jobs at risk

Paris watches as flames engulf one of France’s most famous landmarks

Debenhams on the brink of administration as board reject Ashley’s bid

Emmanuel Macron pushes for a new Europe with European Parliament elections on the horizon

Brexit impacts property market

Brexit uncertainty impacts the property market

Oxford_Street_Selfridges_Christmas_Decorations_2017

Creative Christmas window displays

Toronto downtown skyscrapers

Brief history of skyscrapers

Savvy promotions attract early Christmas sales for retailers

Are savvy promotions attracting Christmas sales for retail stores?

Greenfield developments

Greenfield developments: The facts

facts about converting chapels churches

Things to consider when investing in church or chapel conversions

Lincoln Castle 1068

Exploring Lincoln Castle’s Georgian and Victorian Prison

the leopard inn Burslem

Facts about The Leopard Inn, Stoke-on-Trent

ancient high house Stafford

The majestic Ancient High House in Stafford

retro video game arcades

Retro video game arcades: The comeback

industrial style offices

How to achieve an industrial inspired office