Larger companies are now looking at co-working spaces or serviced offices in an attempt to overcome the lack of available commercial property in the market, according to a property expert.
Mat Oakley, head of European commercial research at Savills, was presenting a market update at a relocation seminar hosted by Morgan Lovell yesterday.
Oakley explained that the market is currently experiencing some of the lowest vacancy rates in western Europe. Currently the amount of available space in the West End area of London is currently at 3 per cent, while the London Borough of Westminster has lost more than a million square feet of office space to residential property in the last five years.
“Rents have gone up dramatically,” said Oakley, “But I don’t think that they will continue at this pace.”
Oakley explained that larger companies are now considering flexible workspaces, co-working spaces and serviced offices as alternatives.
“These are no longer just for SME organisations,” he said.
Oakley also noted that central London’s spiralling property costs will drive business to greater London, suggesting areas such as Stratford could become new business districts.
“You don't have to go very far out of central London to save on the property costs. Outer London boroughs about to have their moment; they now have much better transport links.”
“Greater London will be a bigger beneficiary of this cost-driven move than the rest of the UK,” he said.