Demand for London office space increases more than a third | 20 March 2015
Searches for desk space in the capital increased by 36 per cent in 2014 compared with the previous year, a new study from Office Genie has revealed.
London’s thriving start-up scene is partly behind the rise in demand. However, the average cost of desk space in London is 129 per cent higher than the UK average. This means that start-ups and small and medium-sized enterprises (SMEs) wanting to set up shop in London have to pay £512 per desk for their serviced office space. In contrast, the average UK business only forks out £224 per desk, reports freshbusinessthinking.com.
As a result of this trend, businesses are starting to look outside of the most popular areas for office space. One such area that’s a favourite with SMEs, but has started to see a decline in interest, is Soho. Many of its serviced offices have reached 100 per cent capacity, so searches for space in Soho only increased by 14 per cent compared with the previous year. A lack of space is putting firms searching for office facilities in Old Street and Shoreditch too.
Knightsbridge and Notting Hill are the most expensive places for new businesses to call home, as a desk there costs a whopping £654 per month. Brixton, on the other hand, offers the best value, with the average desk priced at just £233 per month.
SMEs are instead heading to areas like Victoria and Kings Cross, where demand for serviced office space soared by 106 and 60 per cent respectively, reports startups.co.uk. The fact that both areas have recently been revamped is likely another reason why searches for office space have climbed so dramatically.
Peter Ames, head of strategy at Office Genie, said Bristol, Birmingham and Manchester are all thriving as business hubs too, offering a good alternative to London.
“The London start-ups and small to medium-sized enterprise scene is booming and it seems every week a new tech or fintech company launches in the capital,” he stated. “For many business owners, London really does seem to be the only place to be, but that is putting a huge strain on the serviced office space market, with many areas seeing demand significantly outstripping supply.”
He adds that businesses who need to save a bit of cash but still want to be based in London could share an office space.
“In London, the average shared office desk costs around £432, which is 16 per cent cheaper than renting a serviced office space,” Mr Ames explained. “So sharing could be the most compelling answer for what is a race for space in a competitive market.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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