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Choosing the right office location is a critical decision that can significantly impact a business’s bottom line. In a city the size of London, cost disparities between Central London and Outer London areas can be substantial, and the options should be carefully weighed to ensure optimal alignment between location, how much space you need, budget, and overall value.\u00a0<\/span><\/p>\n In this article, we analyse the cost differences between leasing office space in Central London and in Outer London areas.\u00a0<\/span><\/p>\n <\/p>\n Generally speaking, <\/span>Central London<\/span><\/a> refers to the areas within Zones 1 to 3 (London Underground).<\/span><\/p>\n With nearly<\/span> 290 million square feet of office space<\/span><\/a>, Central London is one of the world\u2019s largest and most prestigious business locations. This is a very active market with<\/span> pre-lettings making up approximately 30% of all office-related transactions<\/span><\/a>, which shows that companies that can afford it secure the top options well in advance.\u00a0<\/span><\/p>\n More recently, a flight-to-quality move has seen the best-in-class assets being taken up by insurance, finance and banking firms, who have the means to pay the hefty price tag that comes with these properties.<\/span><\/p>\n Currently, prime office space in some of the most desirable Central London areas command<\/span> triple-digit rates<\/span><\/a>. For example, <\/span>St James\u2019<\/span><\/a> in the heart of the <\/span>West End<\/span><\/a> has average rates of \u00a3125 \/ sq ft.\u00a0<\/span><\/p>\n In <\/span>Mayfair<\/span><\/a>, a recently signed deal became<\/span> the highest rent paid in the city<\/span><\/a> for office space at \u00a3277 \/ sq ft.\u00a0<\/span><\/p>\n Also remarkable are the prime rent levels North of Oxford Street and the <\/span>W1<\/span><\/a> postcode, with averages of \u00a3100 \/ sq ft.<\/span><\/p>\n Outer London<\/span><\/a> includes the boroughs of <\/span>Barking<\/span><\/a> and Dagenham, Barnet, Bexley, Brent, <\/span>Bromley<\/span><\/a>, <\/span>Croydon<\/span><\/a>, <\/span>Ealing<\/span><\/a>, Enfield, <\/span>Greenwich<\/span><\/a>, Haringey, <\/span>Harrow<\/span><\/a>, Havering, Hillingdon, Hounslow, <\/span>Kingston upon Thames<\/span><\/a>, Merton, Newham, Redbridge, <\/span>Richmond upon Thames<\/span><\/a>, <\/span>Sutton<\/span><\/a>, and Waltham Forest.<\/span><\/p>\n The inauguration of the Elizabeth line in 2022 helped generate interest in offices located in western Outer London locations, from Ealing to West Drayton. For example, in Hanwell and Southall it\u2019s possible to find private office spaces in the low \u00a330s \/ sq ft, whereas rates drop to the mid \u00a320s \/ sq ft in West Drayton or Ealing.<\/span><\/p>\n Improved transport options had a similar effect in southeast Outer London. For example, asking rates in Abbey Wood are in the high \u00a320s \/ sq ft. Similar rates can be found in <\/span>Romford<\/span><\/a>, also served by the Elizabeth Line. For comparison, office rental prices here are more than 10 times lower than the \u00a3277 \/ sq ft paid in Mayfair, which despite not being representative of the average cost, indicates the wide disparity between Central and Outer London office rental rates.\u00a0<\/span><\/p>\n Having said that, not all Central London offices cost hundreds of pounds per square foot. To rent office space in central locations like <\/span>Aldgate<\/span><\/a> and <\/span>Hammersmith<\/span><\/a> is still under \u00a360 \/ sq ft. In <\/span>King\u2019s Cross<\/span><\/a>, Midtown, <\/span>Victoria<\/span><\/a>, and <\/span>Holborn<\/span><\/a> average rates are \u00a380 \/ sq ft. Other options slightly further away, like <\/span>Battersea<\/span><\/a> or Hackney, have average rates of \u00a335 \/ sq ft for serviced offices, which are rather on par with some Outer London locations.<\/span><\/p>\n Location alone isn\u2019t the only factor that contributes to price differences, since<\/span> office class<\/span><\/a> also plays an important role across all major UK cities. Generally speaking, Grade B office spaces in the city centre command similar rates to Grade A space in Outer London locations.<\/span><\/p>\n For example,<\/span> Grade B Chelsea offices<\/span><\/a> average \u00a335 \/ sq ft, which is on par with Grade A space in <\/span>Hackney<\/span><\/a>, Battersea, and most of Outer London.<\/span><\/p>\n On this note, we must mention that per sq ft prices for<\/span> Grade B space across most London sub-markets have dropped<\/span><\/a> evenly by 10% to 20% since 2020.<\/span><\/p>\n Another factor to add to our cost comparison exercise are business rates, which are determined by local authorities and can differ significantly between London boroughs.\u00a0<\/span><\/p>\n Business rates aren\u2019t fixed, but<\/span> subject to revaluation.<\/span><\/a> In 2022-2023, the average business rate increase for Central London offices was 7.5%. However, rates have declined in some areas, as is the case of offices in Canary Wharf, where they\u2019re 10% lower than the previous year.\u00a0<\/span><\/p>\n For budgeting purposes, it\u2019s worth mentioning that<\/span> business rates in fringe and Outer London locations increase faster<\/span><\/a> than those in established office hubs.<\/span><\/p>\n Lastly, we look at how the cost comparison fares without the commitment of long-term leases. As a general rule of thumb, desk<\/span> rates in serviced or Central London flexible office spaces can double the rates of those in Outer London<\/span><\/a>.<\/span><\/p>\n For example, in Q4 2023 the city average was \u00a3625 desk\/ month, yet desks in prime Central London locations are typically in the \u00a3700-\u00a3900 desk\/ month range. On the other hand, average rates for flexible office spaces drop to \u00a3400 desk \/ month in <\/span>Southbank<\/span><\/a> or Aldgate. Compare this to the monthly rates of \u00a3200 to \u00a3300 \/ desk in Outer London locations like Croydon, Kingston, or Enfield.<\/span><\/p>\n When comparing the cost of office space in London, it\u2019s important to consider location, office class, and business rates, as well as general trends in different sub-markets. Researching the options and exploring different alternatives can help ensure you make a strategic choice for the right office space that takes your business forward.<\/span><\/p>\n Looking for physical or virtual office space with Central London postcodes? Or would you prefer a Greater London borough location? We provide a wide range of options for serviced offices and workplaces. You can also call us at 020 3965 9617 to talk with a member of our courteous team of specialists. Our office space professionals will assist you and your business in finding the best office in London to meet your specific needs.<\/span><\/p>\n Below are some of our most recent articles about the workplace, including:<\/span><\/p>\n Prime Locations for Office Space, Central London<\/span> Choosing the right office location is a critical decision that can significantly impact a business’s bottom line. In a city the size of London, cost disparities between Central London and Outer London areas can be substantial, and the options should be carefully weighed to ensure optimal alignment between location, how much space you need, budget, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[164,175,369,387,176],"tags":[404,356,26,591,35,592],"_links":{"self":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts\/4257"}],"collection":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/comments?post=4257"}],"version-history":[{"count":2,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts\/4257\/revisions"}],"predecessor-version":[{"id":4315,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/posts\/4257\/revisions\/4315"}],"wp:attachment":[{"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/media?parent=4257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/categories?post=4257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/londonofficespace.com\/buzz\/wp-json\/wp\/v2\/tags?post=4257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Central London Offices: Status at a price<\/b><\/h2>\n
Outer London: Affordability and potential<\/b><\/h2>\n
Comparison by office class<\/b><\/h2>\n
Business rates<\/b><\/h2>\n
Flexible office space: Cost-effective in both Central and Outer London<\/b><\/h2>\n
Conclusion<\/b><\/h2>\n
Need help narrowing down the location for your next London office space?<\/b><\/h3>\n
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