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The events we have seen recently in the capital, such as the Olympics and Jubilee celebrations, contributed in 2012 towards the world’s image of London as a cultural, international, and vibrant city. This kind of popularity, combined with London’s historic influence in terms of international finance, comes at a price, at least if you rent offices in Mayfair, St James’s or other prime West End locations. A recent report by DTZ, the international surveyor, states that London’s West End has overtaken Hong Kong as the most expensive office location on the planet. Its survey analyses total costs per work station in world cities and allocates London’s West End as the most costly at around £14,250 per work station (/ws), with Hong Kong close behind at £13,500/ws and Tokyo, £10,500/ws. The Big Apple does not even appear in the top dozen.
However, these are the headline figures. The cost of a work station in the core of the City of London comes in at £9,000/ws while Leeds, Bristol and Birmingham see costs of a mere £4,000/ws. In the UK, on average just over half these costs are rent, the rest being made up of rates, service charges and insurance.
Central London is a diverse market and whilst some businesses, particularly banking and finance, will pay top dollar for prime locations, London is blessed with a number of sub-markets such as Midtown, City Fringe and Docklands, locations much favoured by the fast-expanding technology and telecommunications sectors which are led by such household names as Amazon, Google and Apple. A priority of these fast-growing companies is to have offices which provide a high-quality work environment with good transport links which will attract and retain talented staff.
Because, even in prime locations, office costs usually only represent between 10% and 15% of the total running costs of a business, priority can be given to finding a location in the most suitable accommodation according to the needs of the business.
Morgan Pryce is 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.