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The last 6 months have seen take up figures for Office space in Central London soar with take up already 17% up on 2013 with the market expanding into new areas. The matter has been made worse by the fact the market has 30% less availability for occupiers in the market subsequently pushing rents up and making it an extremely landlord biased market. However, the impact on the tightness of the market has meant one other area has seen costs soar and that is the fit out market. Recent reports suggest that the market is growing so quickly with so many occupiers looking to take space along with larger occupiers now willing to spend more money fitting out their space that there is now a shortage of both skilled labour and materials.
One of the main reasons for the shortage in materials is down to standards the landlords would like to fit their buildings out to and the confidence they have in the market that, if they spend all this money on the building they will be able to let it relatively quickly and hopefully for a higher rent. As fit out firms take on more and more work, they need more and more skilled workers and unfortunately they are becoming more of a premium, therefore pushing their salaries up and subsequently the fit out cost.
Unfortunately, the fit-out world is a very fickle sector and with such high overheads and costs that when the times are good they need to make full use of them because when they are bad they are very bad. However, at present with more and more occupiers flooding the market and confidence high the fit-out world is buoyant and unfortunately this means costs will only go up!
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.