Cost of serviced offices in Central London drop as commercial leases rise
Commercial property rents and long-term office leases in Central London are set to rise this year, following a two-year drought in building development which is now beginning to find its feet.
However, figures from officebroker.com suggest that the serviced office space market is moving in the opposite direction, as the average cost per person of a service office in Central London dropped by -9% in 2009 Q4 when compared with Q3.
According to Cushman & Wakefield, a flurry of lettings have taken place over recent months which has absorbed a large proportion of existing commercial space. The knock-on effect of this is increased pressure on rent, which is now expected to rise throughout the year.
Reports suggest that prices in Central London for long-term commercial leases have risen more than 5% since last August. Despite this, the rate of lettings has performed well over recent months, with Q4 2009 producing the highest quarterly figure for more than two years.
In the serviced office space market, officebroker.com statistics show that the average cost per workstation for a serviced office in Central London was significantly lower in the last two quarters of 2009 when compared to the same period in 2008.
In addition, the average cost in Q4 2009 for a serviced office in London was -9% down in Q4 when compared to Q3 2009 – showing that the serviced office market is currently still providing an excellent opportunity for businesses seeking space in the capital.
In Q3 2009, the average cost per person of a serviced office in Central London was ┬ú509, which was -22% lower than 2008’s figure of ┬ú658. In Q4 2009, the average cost per person was ┬ú461, a -17% drop when compared to 2008’s Q4 figure of ┬ú560.
This represents a unique opportunity for small businesses to secure space in the capital at a reduced rate, but early indications suggest that this window of opportunity may be narrowing.
For more details of flexible office space to rent in Central London, speak to one of our expert consultants for free help and advice on 0800 9777 770, or by sending an enquiry here. You can also search online for details of our extensive range of Central London offices to find out more.