London office rents driving away small business

Experts claim 17% fall in serviced office tenants down to businesses being priced out

The high cost of serviced offices in central London could be driving away small firms, as data revealed a 17% fall in tenants across the capital since last year.

Statistics released by office search site officebroker.com found that although prices for serviced offices have levelled overall since 2012, a 13.3% rise in the average minimum price per workstation of office accommodation (from £203 to £230) means that many of the capital’s rents now exceed their pre-2008 prices.

The survey found that the Westminster SW1 postcode was the most expensive area in London for serviced offices, with an average price per workstation of £737 – an 8% increase on last year.

In contrast, the EC postcode saw a 10% drop in prices – but this corresponded with a similar rise in demand in as firms have begun to look to the area for more affordable office accommodation.

The data also recorded a slight fall in business workstation requirements – from 5.8% to 5.7%. Industry experts claimed these increasingly unaffordable Central London office prices were behind the steep drop in demand for tenancies.

Chris Meredith, chief executive of officebroker.com, commented: “These statistics show that whilst London is still one of the best places in the world to trade, businesses are perhaps being priced out of central areas.

“This is confirmed by figures highlighting the demand in the capital for serviced office space located in more affordable areas. A fall of 17% in serviced office tenant levels is a big drop in anyone’s books, so it is fair to comment that the cost of space in central London is putting some businesses off.”

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