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Central London’s commercial market has seen vast rental growths over the last 18 months. There have been record rents achieved throughout the Capital, from Mayfair to The City. This has had an impact on tenants, specifically start-up companies that are looking to take space with scope to grow quickly. Landlords are demanding strong rent deposits and high rents, forcing many of these companies to look at alternative options to standard leased offices. Throughout the West End there has been a rise in take up from Serviced Office providers that are looking to capitalise on the buoyant flexible space market. Regus and MWB Business Exchange are two of the big ‘players’ within this, with over 550,000 sq ft taken between the two companies in 2015 in the West End. However, there are a multitude of suppliers also active within the market; serviced office providers now account for 8% of all take up in the West End.
The increase in take up is an attractive match for Landlords, agents and Serviced office providers alike – the providers must take large floor plates, or even buildings, to let out at a premium to their clients. Teresa Beatty, surveyor at tenant acquisition specialist Morgan Pryce, believes this does not come without risk,
“In the current market, these tactics from the likes of Regus, Avanta and MWB make total sense as there are plenty of occupiers looking for flexible space, without being put off by paying a premium. However, if the market turns, providers will be in a position where they have to drop their costs. This can obviously become a major issue if it passes below their agreed rent with the superior landlord.”
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.