London Office Space Market Review of 2010
Due to the financial downturn of 2008, office space enquiries and rents fell dramatically by Q4 2009.
Despite predictions of the recession carrying on through to 2012, 2010 has seen a positive increase of 28% in London office space enquiries. The second quarter of 2010 has also recorded a 12% increase in London office rents, as well as average workstation prices showing a steady decline for the first time since 2008.
London’s Office Space Recovery
The increase of London office space across the whole board may be why London is described as the ‘heartland of economic recovery’. The average licensing length of office spaces show promising and stable rates of increase, with an overall average of +6% in all areas. This figure, as well as the 28% increase of London office space enquiries, is a sure sign of London heading for a strong and stable local economy as confidence within the business sector grows.
This promising increase could be linked to a number of recent factors within London and the surrounding area. The 2012 London Olympic Games, for example, has been the forefront event promoting tourism and providing a source of work for particular industries. Two-thirds of new jobs also come from self-employment or start-up businesses in the last two years; those successful will probably require a larger office space, which may explain some increases in London office rents and enquiries. And, contributing to the trend of self-employment and small businesses, the London Economic Action Plan has encouraged the public sector to buy goods and services from small/local businesses rather than international corporations.
Although these reasons may not be the single contributing factors to the sign of the end of the economic tunnel they definitely highlight the ‘cause and effects’, increasing the demand for more office space and longer licenses.