Month: April 2015

London Office Space 2015: Stratford

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Stratford in East London continues to experience significant regeneration and expansion as a result of the 2012 Summer Olympics, which were centred around Queen Elizabeth Olympic Park. The district within the London Borough of Newham has seen a number of other projects bring new life to the area, including the multi-billion pound Westfield Stratford City shopping and commercial centre. The area’s relatively low rents are expected to continue to attract businesses from across sectors in the foreseeable future.

Stratford’s Economy

In recent years, Stratford has been the focal point for significant expansion and regeneration. High-profile projects have included the Queen Elizabeth Olympic Park, which includes a number of venues for the 2012 Olympic Games including the Olympic Stadium, the London Aquatics Centre, and the London Velopark. The Olympics also added approximately 3,500 new homes when the former Olympic Village was converted into the East Village development. Other projects on the Olympic Park site include 1,500 new homes as part of the East Wick and Sweetwater neighbourhoods, new facilities for University College London and the Victoria & Albert Museum, Loughborough University’s iCity tech campus, and 15 new office and residential buildings in the International Quarter. Developments close to Westfield Stratford City will also add some 5,000 new homes as well as office space, public spaces, schools and other facilities. Other redevelopment projects have included upgrades to Stratford Station and the new 150 High Street, Stratford residential tower. Continue reading “London Office Space 2015: Stratford” →

London in top place as the world’s most expensive office market

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The London office property market has cemented its position in top place among a host of prestigious global property markets for the third year running.Throughout 2014, several indicators suggested that the average cost of office floor space in the capital was rapidly rising. Take up rates rose consistently during 2014, and so did the level of transactions and the amount of office space under offer. This year, London has consolidated its position as the most expensive office market at international level, ahead of key global players like New York or Hong Kong. Take a look at the details behind the stellar performance of the London office property market.

London: The world’s most expensive location for office space


A recently released Cushman and Wakefield study entitled ‘Office Space Across the World’ published a comparison of rental costs between some of the world’s most desirable office locations, which in addition to London included New York, Hong Kong, Paris, Sydney, and Tokyo. London came in top place as the world’s most expensive office market for three consecutive years. Over the past year, average office rental values in the city have increased by 4.6 per cent. The cost of office floor space in London is still far from returning to pre-recession values, as it remains 13% per cent lower than its 2007 values, but market analysts predict that the current trends are here to stay. As the availability of office space continues to decline, prices will rise even further throughout 2015 and beyond.

The main reason behind this upward trend is the ever-shrinking gap between supply and demand. London’s reputation as a global business centre attracts both entrepreneurs and experienced business owners to the British capital, and the effect of unwavering demand on the commercial real estate market is obvious. In the West End, supply has been dwindling since 2007, and currently vacancy rates hover around 3 per cent. This has allowed landlords to rise prices accordingly, pushing average costs to a new record high of £1,681.40/ m2 per year. To put this figure into perspective, consider the average costs of prime office space in the world’s second and third most expensive locations. In Hong Kong, office space in the central business districts averages £1,173.54 / m2 per year, whereas in New York average costs are in the region of £833.53/ m2 per year. Increasing costs seem to be a global trend, since during the past year office rental values have grown by an average of 7 per cent across the major global office markets. Continue reading “London in top place as the world’s most expensive office market” →

London Office Space 2015: Farringdon

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Farringdon is strategically located just outside of the financial and economic hub of the City of London. Along with Clekenwell and Shoreditch, the area makes up the City Fringe North. It is one of two City fringe areas, with the other located to the east and comprising of Aldgate, Spitalfields, and Tower Hill.

Office Space in Farringdon

Farringdon refers to a historic area around Farringdon Station in the London Borough of Islington. Comprising of the wards of Farringdon Within and Farringdon Without, Farringdon is split between areas that once lay inside and outside the London Wall. Like many parts of London just north of the City, office space in Farringdon features warehouse and factory conversions. Sizes typically range from 1,500 to 5,000 square feet, according to property consulting firm Carter Jonas. The area often attracts media and creative industries looking for more affordable office space than traditional locations like Covent Garden, North Oxford Street, and Soho. The northern City fringe also attracts companies in the technology sector, particularly due to its close location to capital markets for tech companies in nearby Shoreditch and popular business incubator programmes in the area. Continue reading “London Office Space 2015: Farringdon” →

Overview of London’s Commercial Property Market – 1st Quarter 2015

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Following a year of exceptionally strong returns on commercial property, the London market has started 2015 dominated by optimistic rental growth prospects and by changing occupier trends.


According to market analysts at Savills, activity levels began to accelerate in February across all commercial sub-sectors, being consistent with the trends observed during the past six months. London’s established reputation as a global hub for businesses in the knowledge economy has brought about an increase in the amount of funding devoted to research and development (over £1.5 billion a year according to the most recent data). This fact has had a clear effect on the London commercial property market, which continues to provide support to new startups and relocating businesses. In turn, this has prompted changing occupier trends. Companies who operate in the knowledge-intensive sector have begun to look for properties beyond the Tech City and other areas that traditionally had a strong presence of media and knowledge companies (such as Soho and London Bridge). New clusters have emerged in Stratford, Tottenham, and New Cross. These areas increasingly cater to the property requirements of small and medium-sized businesses, which made up 47% of all transactions during the first quarter of the year. The current floor space supply is set at 6.7 million square feet and vacancy rates average 6.9 per cent. The top rents achieved during this quarter reached £70 per square foot.

Office market trends

Availability has come under pressure due to the large number of commercial-to-residential conversions and to the significant level of commercial property being held as long-term assets. This is particularly the case in high-value areas like St James or Mayfair, where up to 80 per cent of the office floor space is locked up by investors.

On the positive side, we can highlight the successful redevelopment of the King’s Cross – Euston corridor, also known as the Knowledge Quarter. Here, more than 350,000 square feet of commercial floor space have been taken up in a single transaction, the sub-lease of 6 Pancras Square. According to GVA Research, prime office properties in Camden and King’s Cross have experienced large increases in rental values, driving occupiers out and towards nearby locations like Clerkenwell and Shoreditch, where rents average £57.50/sq ft. Rents in Midtown range between £62.5 and £72.5/ sq ft. Continue reading “Overview of London’s Commercial Property Market – 1st Quarter 2015” →