{"id":1439,"date":"2014-08-14T07:37:38","date_gmt":"2014-08-14T07:37:38","guid":{"rendered":"http:\/\/www.instantoffices.com\/blog\/?p=1439"},"modified":"2024-07-04T06:27:26","modified_gmt":"2024-07-04T06:27:26","slug":"londons-west-end-ranks-1-for-occupancy-costs","status":"publish","type":"post","link":"https:\/\/www.instantoffices.com\/blog\/reports-and-research\/londons-west-end-ranks-1-for-occupancy-costs\/","title":{"rendered":"London\u2019s West End Ranks #1 for Occupancy Costs"},"content":{"rendered":"

London\u2019s West End has topped CBRE\u2019s list of the most expensive office markets in their latest Global Prime Office Occupancy Costs report<\/a>. A square foot of space in this submarket currently costs an average of \u00a3164 per annum; while in the past year, West End occupancy costs rose by 13.5%.<\/p>\n

According to the report, \u201cThe improvement in the UK economy has triggered a strong recovery in the demand for office space throughout London<\/a>. This demand, along with the shortage of available space, has been putting upward pressure on prime rents throughout 2013 and into 2014.\u201d<\/p>\n

\"shutterstock_1055257-1\"<\/p>\n

We interviewed Gemma Marris, Instant\u2019s Operator Account Manager, on the implications for businesses \u2013 both prospective and current.<\/p>\n

\u00a0<\/b><\/p>\n

1. What does this mean for businesses currently renting in the area?<\/h3>\n

Current tenants are looking at when their existing leases end, as the likelihood is that their renewal rate will go up. Many of the business we are talking to are considering their options and weighing up the pros and cons of considering other locations.<\/p>\n

2. What are the implications for businesses looking to move into the area?<\/h3>\n

Higher rent! There is huge demand for limited supply. Businesses looking to move into the area will be faced with fewer options to choose from. Our clients are increasingly needing to make quicker decisions in order to ensure they are getting the offices that they want.<\/p>\n

3. What advice would you give to companies looking to move into the area?\u00a0<\/b><\/h3>\n

At the moment, moving quickly on decisions is necessary. It\u2019s sensible to have a clear list of requirements, which also details which items are non-negotiable and which aspects of your next office you might be willing to be flexible on. Lastly, if the West End does come in as just too expensive, talk to us; we can suggest great options that are close by, but more affordable.<\/p>\n

4. Which other areas of London would you recommend to businesses who cannot afford the price tag?<\/h3>\n

I\u2019d recommend Victoria<\/a>, Kings Cross<\/a>, Euston or south of the river around London Bridge and Waterloo<\/a>. These areas have good transport links, with substantial investment in the nearby amenities. There is a lot of regeneration taking place.<\/p>\n

Some districts of London are best known for certain business types (like insurance companies generally being located in EC2) but this is increasingly changing. Don\u2019t be restricted to a particular location just because of what your business does \u2013 many companies are starting to look outside of traditional industry areas.<\/del><\/p>\n

5. What other office markets in London and the rest of the UK do you think will give the West End a run for its money?<\/h3>\n

There are none in terms of price per square foot. While the West End is undisputedly the most expensive area in the world right now, the prices in the City have been increasing since the start of the year. Aberdeen has also seen a high desk rate due to the lack of availability.<\/p>\n

6. London\u2019s West End market has restrictions in place in terms of new developments. What are the implications for the future of this area, in terms of growth and development?\u00a0<\/b><\/h3>\n

The demand is constantly increasing, but if supply is to be restricted, then pricing will continue to increase. The number of new buildings coming to the market is unlikely to rise substantially, as Mayfair for example is full of listed buildings that cannot be altered. This is the same for other areas in the West End as opposed to the City, which is more modern and can be developed which increases the supply.<\/p>\n

\u00a0<\/b><\/p>\n

7. Overall, how would you describe the state of the current West End office market?\u00a0<\/b><\/h3>\n

It is definitely a landlords market. There is huge demand for space and not enough supply. Anything coming to the market is pushing \u00a31,000 per workstation for Grade A space.<\/p>\n

8. Why is this area so attractive to businesses? What amenities does it provide that other areas don’t?<\/h3>\n

The West End provides internationally recognised areas – Soho, Covent Garden, Mayfair, and St James.\u00a0 It also has good transport links and period buildings, which attract people to the area.<\/p>\n

The West End is also the heart of what many would consider \u201cCentral London\u201d. It provides very easy access to a host of restaurants\/bars and lunch opportunities, which keeps staff happy and improves retention. The West End also attracts the kind of high quality staff that a company would be looking for, as opposed to if they were based in zone 3 or 4.<\/p>\n

\"london-west-end\"<\/p>\n

Thanks to Gemma for sharing her expertise. As the CBRE report noted, \u201cGlobal institutional occupiers are competitive and want the best space in the best locations – and are willing to pay a premium for it.\u201d Are you a business looking to move into the West End area<\/a>? Take a look at our West End guide, or contact us<\/a> today.<\/p>\n","protected":false},"excerpt":{"rendered":"

London\u2019s West End has topped CBRE\u2019s list of the most expensive office markets in their latest Global Prime Office Occupancy Costs report. A square foot of space in this submarket currently costs an average of \u00a3164 per annum; while in the past year, West End occupancy costs rose by 13.5%. According to the report, \u201cThe improvement in the UK economy has triggered a strong recovery in the demand for office space throughout London. This demand, along with the shortage of available space, has been putting upward pressure on prime rents throughout 2013 and into 2014.\u201d We interviewed Gemma Marris, Instant\u2019s Operator Account Manager, on the implications for businesses \u2013 both prospective and current. \u00a0 1. What does this mean for businesses currently renting in the area? Current tenants are looking at when their existing leases end, as the likelihood is that their renewal rate will go up. Many of the business we are talking to are considering their options and weighing up the pros and cons of considering other locations. 2. What are the implications for businesses looking to move into the area? Higher rent! There is huge demand for limited supply. Businesses looking to move into the area will be faced with fewer options to choose from. Our clients are increasingly needing to make quicker decisions in order to ensure they are getting the offices that they want. 3. What advice would you give to companies looking to move into the area?\u00a0 At the moment, moving quickly on decisions is necessary. It\u2019s sensible to have a clear list of requirements, which also details which items are non-negotiable and which aspects of your next office you might be willing to be flexible on. Lastly, if the West End does come in as just too expensive, talk to us; we can suggest great options that are close by, but more affordable. 4. Which other areas of London would you recommend to businesses who cannot afford the price tag? I\u2019d recommend Victoria, Kings Cross, Euston or south of the river around London Bridge and Waterloo. These areas have good transport links, with substantial investment in the nearby amenities. There is a lot of regeneration taking place. Some districts of London are best known for certain business types (like insurance companies generally being located in EC2) but this is increasingly changing. Don\u2019t be restricted to a particular location just because of what your business does \u2013 many companies are starting to look outside of traditional industry areas. 5. What other office markets in London and the rest of the UK do you think will give the West End a run for its money? There are none in terms of price per square foot. While the West End is undisputedly the most expensive area in the world right now, the prices in the City have been increasing since the start of the year. Aberdeen has also seen a high desk rate due to the lack of availability. 6. London\u2019s West End market has restrictions in place in terms of new developments. What are the implications for the future of this area, in terms of growth and development?\u00a0 The demand is constantly increasing, but if supply is to be restricted, then pricing will continue to increase. The number of new buildings coming to the market is unlikely to rise substantially, as Mayfair for example is full of listed buildings that cannot be altered. This is the same for other areas in the West End as opposed to the City, which is more modern and can be developed which increases the supply. \u00a0 7. Overall, how would you describe the state of the current West End office market?\u00a0 It is definitely a landlords market. There is huge demand for space and not enough supply. Anything coming to the market is pushing \u00a31,000 per workstation for Grade A space. 8. Why is this area so attractive to businesses? What amenities does it provide that other areas don’t? The West End provides internationally recognised areas – Soho, Covent Garden, Mayfair, and St James.\u00a0 It also has good transport links and period buildings, which attract people to the area. The West End is also the heart of what many would consider \u201cCentral London\u201d. It provides very easy access to a host of restaurants\/bars and lunch opportunities, which keeps staff happy and improves retention. The West End also attracts the kind of high quality staff that a company would be looking for, as opposed to if they were based in zone 3 or 4. Thanks to Gemma for sharing her expertise. As the CBRE report noted, \u201cGlobal institutional occupiers are competitive and want the best space in the best locations – and are willing to pay a premium for it.\u201d Are you a business looking to move into the West End area? Take a look at our West End guide, or contact us today.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[73],"class_list":["post-1439","post","type-post","status-publish","format-standard","hentry","category-reports-and-research","tag-west-end"],"yoast_head":"\nLondon\u2019s West End Ranks #1 for Occupancy Costs - Instant Offices Blog<\/title>\n<meta name=\"description\" content=\"London\u2019s West End has topped CBRE\u2019s list of the most expensive office markets in their latest Global Prime Office Occupancy Costs report. 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