Shared Office Space Account for Biggest Demand For London Properties
Data showed that there is an increasing demand for shared offices in Central London. Flexible co-working spaces have become increasingly popular in the city.
The trend has inadvertently spurred the need for office refurbishment in London, as companies prefer taking up short-term leases. Start-up firms in particular have driven demand for such arrangements, as they want to try renting out a certain area for a short period before signing up for a long-term commitment.
Banks and technology firms used to be the main source of demand for London offices. However, the aftermath of Brexit caused uncertainty among companies, which eventually led them to rethink their office space requirements.
WeWork Cos. and The Office Group are among the co-working space providers that fuel demand for flexible leases. In the first half of 2017, the two companies have leased 884,000 square feet of office space, representing 18.3 per cent of total leased area in the same period and higher than year-ago levels.
Rental costs in London also affect the trend, as prices in the city are considered to be the second most expensive in the world.
A CBRE Research report showed that prime office rents in London’s West End amounted to US$214 per square foot per year. Those who want to rent offices in Hong Kong’s Central district will need to pay US$303 per square foot each year, the most expensive worldwide.
Rents in New York’s Midtown area cost US$203 per square foot per year. West Kowloon in Hong Kong and the central business district in Beijing completed the top five most expensive cities to rent offices, the report noted.
Renting office properties in London requires a significant amount of money. Shared office spaces are becoming more popular because they are cost-efficient.