Amid recent figures that reveal just how quickly London rents are rising, there are growing fears of a London property bubble. Central London offices have seen a 10% rise over 2015. This increase takes the cost of office space in London to pre-crisis highs, up to a record £66.50 per square foot. Yet despite these warning signs, companies based in London are still expanding their floor space, in what workplace management experts Condeco Software warn is an increasingly risky strategy.
Paul Statham, founder and CEO of Condeco, said: “Despite the rising cost of property in central London, London companies continue to engage in risky office expansion. Not only is this costly in the short-term, but businesses could incur significant losses if the property bubble bursts.
“Businesses must look instead to smarter ways of using their existing property. With a lot of companies now embracing flexible working, the question is whether businesses are utilising their existing space effectively. Our research has found that companies can be using as little as 38% of their office space, meaning that there is tremendous potential for efficiency savings in workplaces across the city. Technological advances enable teams based in different locations to work collaboratively, and can reduce the need for offices in city centres.
“Before they make the decision to invest in new or larger offices, business leaders should be across how their current space is being used, and ensure that their costly investment is entirely necessary before they make it. Now is the time to maximise the potential of existing property, to avoid being left high and dry in the event of a property crash. Moreover, reconfiguring the use of existing workspace, embracing technology and improving in-house collaboration will lead to a more connected workforce and boost productivity.”
