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Why is 2017 a great year to rent office space in London?

by Kate Tattersfield

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As London's office providers go the extra mile to incentivise their tenants, there's never been a better time to rent a workspace in the capital.

The commercial property landscape in London is shifting; post-Brexit, landlords are becoming ever more occupier focussed, in an attempt to attract new business and retain their current clients.

Many of our serviced office partners are offering ever more generous rent-free periods, as well as other perks like free meeting room usage. This week, The Office Group made headlines in the startup-sphere by publicising its plan to award 100 startups with a year's free rent across 15 London locations- in a bid to promote and recognise entrepreneurship. TOG's Olly Olsen commented: "We have never forgotten how hard it was to get off the ground, so we're delighted to be able to provide space for young, ambitious start-ups to grow and succeed amongst like-minded people."

They're not the only ones. Serviced office provider Reflex promote up to 3 months' rent free on many of their central London locations, alongside flexible, shorter term agreements.

And it's not just small businesses that should be pleased- discounts on longer term leases are also benefitting large companies and corporates. According to research by estate agency Carter Jones, large occupancy 10 year leases are being signed with up to one year rent-free in the City core. All-inclusive costs for occupiers in prime West London locations have fallen by 4.5% over the past year, despite an increase in business rates and service charge costs. In some cases, certain areas have witnessed an upturn in costs: Canary Wharf saw the biggest increase with prices rising by 4.4% to £78.30/ sq ft.

City fringe locations such as Shoreditch and Clerkenwell, currently letting at around £93/ sq ft, will likely loose cost advantage over the City when the 2017 business rates revaluation come into effect in April.

Office Rents Q1: Predictions

  • £62.50/ sq ft predicted average prime City rent, a £70/ sq ft decrease
  • 12.4% expected decrease in Canary Wharf rents
  • 7.4% expected decrease in Southwark rentals

For all the current rent-free deals in London this quarter, contact us on 0203 051 1986 and a member of our team will be happy to go through them with you.

Written by Kate Tattersfield


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