By Daniel Hunter
High office prices could be pushing businesses out of central London claim industry experts, as data reveals a 17% fall in serviced office tenant levels.
Statistics provided by market leaders, officebroker.com, found that serviced office prices in the capital have roughly plateaued compared to the first quarter of 2012.
Across London, the average price per workstation has fallen by only three per cent (£564 down from £583) with many of the capital’s offices now exceeding their pre 2008 prices.
What’s more, the average minimum price of London office space has increased from £203 to £230 per workstation, a rise of 13.3%.
It is therefore seen that the 17% fall in serviced office tenant levels, particularly in the centre of the capital, could indicate that some businesses are beginning to be priced out of central London.
Furthermore, the average number of workstations required sits at 5.7 down from 5.8 at the same point last year.
The most expensive area is SW1 which had as average workstation rate of £737, an eight per cent increase on last year. Offices in the WC postcode also saw prices increase by six per cent.
However, the EC area saw a 10% drop in its average workstation price although this was matched by having the highest workstation requirement across the board.
This is a key indicator that businesses are entering into these particular areas as they are looking for more affordable office accommodation.
“These statistics show that whilst London is still one of the best places in the world to trade, businesses are perhaps being priced out of central areas," CEO of officebroker.com, Chris Meredith commented.
“For instance, whilst the average price per workstation has roughly plateaued, the average minimum price has increased by more than 13%. This is a big step-up for many small businesses.
“This is also confirmed by figures highlighting the demand in the capital for serviced office space located in more affordable areas.
“A fall of 17% in serviced office tenant levels is a big drop in anyone’s books, so it is fair to comment that the cost of space in central London is putting some businesses off.”
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