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Key Office Space Trends and Statistics for London 2015

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The London commercial property market is expected to show positive results in 2015. During the last year, office property market sector has shown of a number of trends including accelerated rental growth, declining vacancy rates, and stable investment yields are some of the key trends that have characterized the office market across most London areas over 2014.

The key trends expected across the London office space rental market include increased demand, vacancy rates as low as 4.5%, an increase in rental costs across London up by 4.3% overall and the commercial property market as a whole expected to experience double digit growth.


London office rental market 2015 - Key trends infographic

Who’s Taking London Office Space in 2015?

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Principal occupier industries for office space for 2015

Being one of the world’s economic powerhouses, the British capital attracts a wide range of talented individuals, wealthy investors, and real estate agents from all over the world. The city’s thriving economy and great expansion rates have had an indirect effect on the commercial property market, which has just experienced one of its most promising years since the onset of the recession. According to real estate experts, what in 2014 were promising trends will become strong and continued levels of growth during 2015. In fact, the commercial property market in London is set to experience the highest levels of rental growth since 2007.

In particular, the real estate office market is expected to be one of the best performing sectors this year. This is mainly due to the fact that an important number of jobs are being created in certain industry sectors that are traditionally office-based. This report provides an overview of the principal occupier industries for office space in London.

Sectors to watch out for in 2015

The financial and banking industries have been slowly recovering from the effects of the recession, but according to market analysts, other industry sectors are set to surpass the office take-up rates of these traditionally important industries. The creative sector is among the key industries that have profiled themselves as some of the main occupiers in London. For the past five years, this sector has been booming across London, and especially in areas like the northern city fringe (Shoreditch, Old Street, Clerkenwell, etc.). Continue reading “Who’s Taking London Office Space in 2015?” →

London Office Space Website Relaunch

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London Office Space logo

We are very excited to announce that today the LondonOfficeSpace.com website relaunched with an entirely new look and feel.

Marketing Manager, Kate Aird, said, “London remains one of the most popular cities in the world for companies of all sizes and types, and the LondonOfficeSpace.com site fills a vital role in helping people find the right space to establish a new business or grow an existing one.

Continue reading “London Office Space Website Relaunch” →

Focus on Business in the City of London

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Focus on Business in the City of London from LondonOfficeSpace.comWithin the square mile that makes up the City of London, there are more than 14,000 businesses. Fortunately the city’s landscape reaches high, otherwise there wouldn’t be much more room for budding entrepreneurs.

Known worldwide for being a hub of financial activity, the City of London is home to some of the world’s biggest accountancy firms, banks, and investors. Amongst the financial moguls you’ll find the occasional law firm, tech ventures like Google, and telecommunications outfits like Three. Competition for rental space is fierce, and the City of London’s local government does expect businesses to commit to sustainable practice. Knowing a little more about this area in general can help you determine whether it’s the right place to invest.

The City of London’s Financial Sector

The City of London is also known as the “Square mile”, and when investors worldwide hear that phrase, they know people are referring to the UK’s financial hub. There, you will find traditional banks and insurance agencies, including international branches like the Bank of America and the Bank of Canada. Foreign exchange businesses also thrive in the City of London, with a turnover of around 0.73 trillion alone.

Sitting at the heart of all this financial activity is the London Stock Exchange, which has been in existence since 1801. Alongside the heavily regulated London Stock Exchange is the alternative investment market, which exists for those who do not have the usual connections for traditional investing. It’s less well regulated, but it does open the financial floor up to a broader range of investors.

Although the finance industry dominates the City of London’s business activities, you will find the odd non-financial venture. This includes Google, which is home to one of London’s most innovative offices with hundreds of employees. Finally, there’s Three, which is a relative newcomer to the telecommunications industry, but is one that continues to grow stronger on a daily basis. Continue reading “Focus on Business in the City of London” →

Overview of London’s Commercial Property Market – 3rd Quarter 2013

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According to the latest research data, during the third quarter of 2013 the commercial property market in the British capital continued to show signs of growth. These signs began to be evident earlier in the year, and in line with the forecasts, the market has continued to stabilise between the months of July and September.

Across all sectors take up figures have been on the rise, but particularly in the retail and office markets. With nearly 3 million square feet being taken up during this quarter, the availability of Grade A commercial space in London has recently hit a ten-year low. Following a period of generalised slowdown in economic activity caused by the recession, it finally seems that the commercial property market is on its definitive way to recovery. The positive signs are particularly striking when compared to the same period during 2012, as in the year to date take up figures for commercial property in London are 42 per cent higher than last year.

Despite the positive outlook, investors and occupiers remain cautious, and this has been reflected in the value of prime rents, which remain stable across the commercial property market in the capital. Other market indicators that are worth mentioning include the increased vacancy rates and supply indexes in the West End. This, along with low occupier demand and a very low volume of projects under construction, suggest that there is a clear preference for properties in The City and Docklands areas.

Key trends in the London office property market

During the third quarter of 2013, approximately 75 per cent of all the properties taken up were classified as office space were based in The City. The properties in this area of London continue to be favoured by firms who are looking to upgrade their office accommodation, despite the high cost of prime rents when compared to other parts of the capital. Continue reading “Overview of London’s Commercial Property Market – 3rd Quarter 2013” →

Overview of London’s Commercial Property Market – 2nd Quarter 2013

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During the second quarter of 2013, the commercial property market in the British capital has been affected by three main factors. The first and most important has been the downgrade of the country’s credit rating score from AAA to AA+. This downgrade, which took place right at the start of the quarter, means that economic growth will be slow for the next three years. Economists expect that up until 2016, growth rates will stay at 1.6 per cent or below. The other two factors that have had an impact in the commercial property market are a weak labour market and decreased consumer and investor confidence.

However, and despite the seemingly negative outlook that has characterised the industry during past quarter, the commercial property market in London has proved to be resilient, especially when compared to other parts of the country. In this article we take a look at the main developments that have taken place in the commercial property sector during the second quarter of the year.

The office property market in London

The office sub-sector in London has been the highest performer during the past three months. During the second quarter of the year, the office property market has seen a rise in the interest of buyers and developers in properties located in the Thames Valley. Demand has also increased in other parts of Greater London, such as the M25 corridor and areas located along the M4 and M40. Other key trend that has characterised this quarter has been the tight supply of office floor space in London’s West End. This has led to a progressive move from West to East, as occupiers and investors are finding more choice in peripheral areas of the capital.

The office market in Central London and the City has experienced marginal growth, which has been mostly driven by foreign capital brought in by overseas investors. Yields for this type of property are currently set at 5 per cent, which is considered to be a healthy figure although it has not yet matched the peak that occurred in the first quarter of 2010.

Overall, transaction volumes for office floor space in London have decreased slightly during the second quarter of this year, and currently remain at under 5,000 transactions for a total floor space of 3.4 million square feet. Market analysts predict that transaction volumes will remain stable over the next two quarters, and that rental value growth will not improve significantly until 2014. The most important transactions during the past quarter have been led by Amazon’s move into a 205,000-square feet City property, followed by Bird and Bird’s lease of 138,000 square feet of office space in Midtown.

Another key trend that has become ever more evident during the past three months is the preference for long term leases of secondary office space in and around the capital. The returns on this type of commercial property have peaked at 3.6 per cent, as opposed to the 2.7 per cent yielded by primary office floor space. The outperformance of secondary office assets and long leases over short term leases is expected to continue until at least the end of the year.

In terms of rental values, offices in the City of London have remained more or less stable at £55 per square foot. By contrast, the West End’s limited supply of good quality office space has driven average rental costs to £100 per square foot. This figure represents an increase of over 9 per cent when compared to the values of the past two years.

Retail properties in London

Along with the office sub-sector, the London retail property market has topped the best performing lists in the country. The mild weather has caused footfall to pick up, and in turn this has resulted in increased prime rental values for retail properties in Central London. During the past three months, rental values for retail floor space have risen by up to 14 per cent in areas like Old Bond Street. Other areas that are experiencing a rise in rental values are Regent Street, King’s Road, Marylebone, High Holborn, and Paddington.

The key leasing transactions in the retail sector have been led by luxury and flagship retailers, such as Dior, Camper, Michael Kors, and Wasabi. In contrast with the office market, there is a clear preference for long term leases in the London retail property market, with the average lease lasting 10 years.

In terms of retail investment, the second quarter of the year has seen a large rise in transaction volumes, which are up by 80 per cent when compared to the last quarter of 2012. Nevertheless, prime yields have remained stable at 3 per cent, and it is expected that they will not surpass the 3.5 per cent mark during the remainder of this year.

The Changing Landscape of the Docklands Area

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The landscape of the London Docklands as we see it today is aesthetically very different to how it appeared as recently as thirty years ago. The area referred to as the London Docklands stretches from London Bridge for thirteen miles east along the River Thames, incorporating the London boroughs of Tower Hamlets, Greenwich, Lewisham, Newham and Southwark. When the Georgian docks began to open at the start of the 19th Century, they operated under the Port Of London Authority and ultimately formed the world’s largest port. The surrounding areas were populated by the families of those who worked on the docks and in related industries such as factories and warehouses; the docks were closed in 1980. Continue reading “The Changing Landscape of the Docklands Area” →

Central London’s Most Exclusive Offices

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If you are looking to locate your business in an exclusive area of London, then you will most definitely want to have a look at the Knightsbridge area, as this is one of the prime areas of London. London is an expensive place to relocate to any reason, including for your business needs but it is also the financial hub of the UK, so you will be making money back by being so close to all of the action in the business world.

There are few establishments that can compete with what the offices at 64 Knightsbridge have to offer. These amazing office spaces are located close to the green spaces of Hyde Park. The offices at 64 Knightsbridge have a beautiful old front to their building, adding to the appeal to the building, with a very modern feel to the interior. The building has a beautiful classical façade with a business centre that has modern artworks and the latest up to date business technology. The well equipped office spaces are of a very high standard, with meeting rooms, conference rooms and a large boardroom, everything that you will need to run your business to the high standard that is expected in this business capital.

These office spaces are also fully serviced, with all the supporting technology that you could possible want located onsite, including catering and also partner privileges at the five star Mandarin Oriental Hyde Park Hotel.

This exclusive centre is the perfect location for your business to be situated, as with such a prestigious location, it will be easy to impress potential and existing clients with the beautiful surroundings. You could take them for a walk through Hyde Park, to any of the fine dining establishments nearby or to the world famous Harrods store.

Notting Hill is also a very sought after location for the higher end of office location, which was of course made popular by the film of the same name. Ledbury Mews North is situated in the W11 area of London, close to Ledbury Road and Westbourne Grove. This office space is a beautiful example of a traditional mews and is in a nice and quiet location, being situated on a no through road which also has restricted parking, which also allows for easy loading and allows for temporary parking.

Regents Street in Mayfair is also one of the most desirable places to have you business located. There are offices available here to rent which have been recently renovated to the expected very high standard. The modern and highly equipped offices are situated in magnificent Grade 2 listed buildings. Rent available on these highly sought after offices can be paid for between 3 months and 5 years.

Additional information on commercial property, real estate, setting up your first office and renting versus buying office space.

Europe’s Tallest Skyscraper – London’s Shard Building

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The Shard building, which is located in London Bridge, is the tallest skyscraper in Western Europe. Designed by world renowned Renzo Piano, the structure, which is still under construction, will comprise of ninety five floors. The Shard will be home to high quality office suites, upmarket restaurants, luxury residential apartments and the 5 Star Shangri La Hotel. The building will eventually tower 310 metres (1,017 feet) over South East London and will provide impressive 360 degree panoramic views over the City. The viewing galleries are expected to receive one million visitors a year and people will be able to see as far as Hampstead, Heathrow and the North Downs, up to thirty miles on a clear day.

An estimated 8,000 people will eventually live and work within The Shard and architect Renzo Piano, who co-designed the Pompidou Centre in Paris, sees the building as a ‘Vertical City’. The idea for the concept was taken to Piano more than a decade ago by property developer Irvine Sellar. According to E&T Magazine, Mr Piano has said he wanted to create ‘a shard of glass, a spire tower of angled planes of glass that will reflect light and the changing patterns of the sky so that it will change according to the weather and the seasons’.

In addition to the premium office space, cafes, restaurants, apartments and shops the Shard will also house exhibition and performance space. The highly sought after premium office suites will be located on floors 2-28 and will include conferencing facilities. The five fine dining restaurants will be situated on floors 31-33 and the Shangri La Hotel will be located on floors 34-52, which will have two hundred luxury five star suites and is located on floors 34-52. The exclusive apartments will be situated on floors 53-65 and will be the highest residences in the UK. The Observatory, which is located on floors 68-72, will house the viewing decks. In addition to the twenty six floors of office accommodation within The Shard, more than fifty five square feet of office and retail space will be provided, attached to the eastern corner of the building, called London Bridge Place or referred to as ‘the Backpack’.

There has been some criticism of the ambitious project, which began in 2009, which once complete will have cost and estimated £450 million. English Heritage has reportedly said the Shard will obstruct the view of St Paul’s Cathedral as well as the Houses of Parliament. The Shard is due to be completed by May 2012.

Office Art and Decor

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When choosing how to decorate your office it is important to choose art and décor that speaks positively about the environment of the office and sends the right message to both employees and clients.

It can be difficult to choose the right colours, wall hangings or sculptures that not only fit in with the corporate culture but also adhere to a sense of professionalism and will help to create a relaxed and welcoming atmosphere for clients. You and your employees also spend a large amount of time in the office so it should be an interesting and motivating place.

Continue reading “Office Art and Decor” →