Written by: Keith Tully
Published: 24th April 2015
A growing number of companies are finding it difficult to expand their offices in central London locations as supplies of quality space continues to dry up across the capital.
That’s according to a report from the property advisory firm Cushman & Wakefield, whose figures point to a strong rise in demand for offices in London in recent quarters.
In fact, the company’s data show that office space uptake across the city increased by as much as 42 per cent over the course of last year, with the rise in 2013 recorded at a strong but notably slower 33 per cent.
One consequence of the squeeze on quality available office space in central London has been a broadening of search areas among top companies. According to a recent Telegraph report, there are more and more professional service companies in London looking beyond traditional business districts to find the office space they need.
A generally more positive economic outlook and a strengthened jobs markets in the UK as a whole is credited with giving corporate executives confidence to expand their offices and the scale of their workforces in London. But appropriate offices are proving tougher to come by.
“Vacancy rates are anticipated to be squeezed further in 2015, while prime rents will continue to trend upwards,” explained Ben Cullen, a Cushman & Wakefield director. “This combination will see further uplifts in the number of occupiers expanding their search area to satisfy real estate requirements.”
In recent months there has been an increase in office relocations among established companies in the capital, with the likes of accounting giants EY and the French banking group Societe Generale having recently switched office sites in different parts of London.
New arrivals in London have also added to pressure on supply of quality office space, with the E-commerce giant Amazon among the big names to have significantly increased its presence in the City of London over the past 12 months.
It is also understood that many company bosses are keen to see their organisations secure all the London office space they need in the near term before prices rise even beyond their current unprecedented highs per square foot.