One third of London City offices occupied by Insurance sector
Research shows that during the 4th quarter of 2009, around 30% of office space in the City of London was newly occupied by insurance companies.
Commercial property agent NB Real Estate claim that out of a total of 860,000 sq ft of office space let in the City during Q4 2009, the insurance sector took around 250,000 sq ft.
Traditionally, offices in the City of London are occupied by the financial sector. It is possible that since the credit crisis and the subsequent drop in rental values of commercial property in central London, insurance companies have been able to take up space in the City and even upgrade to more prestigious buildings.
Commenting on this, NB Real Estate’s James Gillett, Director of the City of London Agency, said:
“Historically the space requirements of the insurance sector in the City have been lower than those of banks, but over the last year they have proved to be a vital prop to the market,” adding, “current rents and incentives are seen by many as a steal.”
NB Real Estate have observed many businesses moving from secondary space to Grade A office space, which is typically new or recently refurbished, occupies a prime location, and generally offers a more prestigious image.
Gillett adds that many insurance firms have acquired prime office space as they have “seen the opportunity to upgrade”, not just for a good deal, but also in order to move into more modern offices that provides a more efficient workspace.
However, as Gillett comments: “The most generous rent free offers are now off the menu”, which suggests that – with the UK now officially having exited recession and many property agents forecasting a rise in rental values in 2010 – the window of opportunity to take up space in the City at a “steal” could soon be narrowing.