18 December 2015, Office occupiers spending half a million pounds per annum on office space in Stratford can afford more than three times the amount of space than in the West End, according to the latest research from Carter Jonas, the UK property consultancy. An annual rent of £500,000 secures just 3,922 sq ft of space in the West End, compared with 13,333 sq ft in Stratford, 8,000 sq ft in Midtown and 7,692 sq ft in the City fringe.
Darren Yates, Head of Research, Carter Jonas said: “Half a million a year is the typical rent paid by many small to medium-sized businesses in the south east of England, with a turnover of around £5-10 million and a staff compliment of up to 100. Our latest research shows just how far that will stretch should corporates choose alternative locations beyond prime Central London.”
“London is becoming more polycentric in terms of its major business hubs, with places such as Stratford, Battersea, Victoria and Croydon emerging as viable locations which offer better value to occupiers. At the same time, significant infrastructure improvements are making these areas increasingly accessible.”
Further afield, office affordability improves further still, with locations such as Reading and Maidenhead offering 13,889 sq ft, 14,286 sq ft respectively for £500,000 per annum. Of the locations surveyed, Watford and Basingstoke offer the best value for occupiers, providing over five and seven times as much space respectively, compared with the most expensive locations in Central London.
Michael Pain, Head of Tenant Advisory, Carter Jonas said: “Increasingly, tenants are questioning the need to retain all of their business functions in Central London as office rents continue to increase in the wake of declining vacancy levels and limited choice. While established areas such as the West End and the City will remain the location of choice for many large global firms, rising office costs combined with falling availability mean that many corporate occupiers are now considering more cost-effective alternatives which are now emerging as vibrant commercial hubs in their own right.”
The cost pressures on occupiers are expected to continue in the medium term, as a result of continued rental growth and the business rates revaluation adding to this from April 2017.