New year, new location?
23 December 2015 by Lucinda Stacey
We all know that working and living in London comes at an expense. So it comes as no surprise that research carried out says that the rise in London property costs could lead to firms relocating outside the capital.
So what has led to the supposed wave of relocation? The combination of having to pay higher salaries to staff so they are able to afford the cost of London living and paying the ever increasing office rent is causing many companies to reconsider their location. Property agent, Savills claim the average cost of an employee has risen to more than £50,000 a year in central London, compared with an average of £33,685 in the rest of the UK. This cost is comprised of just over £35,000 in wages but an additional (and rather staggering) £15,000 per work station in rents, rates and service charges. These London costs are three times what they are in the regions outside the popular city.
Savills have also reported that unfortunately, the rise in property costs is not being matched by a rise in output. They record that in the last five years, rents in the West End have risen faster than output, with only companies in the creative and technology industries increasing their output at a faster rate. Average office rents in the West End are £106.91 per sq ft, while in the City it is £75.50 per sq ft; the highest ever.
Savills have also noted that many occupiers are already looking at smarter ways of accommodating increasing numbers of workers in the same space to minimise costs. Mat Oakley, head of European research at Savills commented that “we do expect to see more organisations exploring the opportunity to split their operations between low and high cost centres, both in terms of staff and property costs. For smaller companies and startups, the fact that central London rents now outpace growth in the majority of sectors may lead to them looking at whether they can secure a cheaper rent elsewhere in Greater London.”
The previous blog written on office sharing is another concept which closely links with this one. The link to this can be found at the bottom of this blog and is another option you may wish to consider.
If you are in a similar position and want to relocate your office space, we here at Fisher Jones Greenwood can help. For more information, please contact us on 01206 835300.
For further information on office-sharing and co-working arrangements; please read our blog: Sky high potential for offices in the cloud.