Time to rent “cheap” office space around the M25 as rents fall 15%

It’s time for occupiers to consider the M25 as a new hotspot in the UK for cheap office space to rent near London.

According to a recent report from Knight Frank, the price of the office space for rent in the M25 south east area has fallen by 15% and is expected to fall a further 18% between 2009 and 2010. After seeing a great peak in the average rental price up to £28 per sq ft, M25 office space rents are now facing a fall and not expecting to recover until 2012.

Due to the oversupply of office space, especially in Uxbridge, Maidenhead and Bracknell, the competition around the M25 is predicted to get tougher at the advantage of the occupiers. Knight Frank’s forecast shows the rent free period to dramatically increase in order for the landlords to fill the space.

Average prime rents in Q1 for the key towns were down and we currently observe prices such as £19 sq ft in Basingstoke, £24 sq ft in Gatwick, £25 sq ft in Heathrow and a comparatively low £34 sq ft for the office space in Hammersmith.

The best move for occupiers looking for offices to rent in and around London would be to make a deal while the rents are still low, as with 300 lease breaks due to fall in the next 3 years, you can expect to see a rise in rents due to the increase demand that will bring.