London 2nd Most Expensive City in the World for Office Rent
Which cities have the highest office rent? Tokyo? Singapore? Shanghai? While Asian cities are renowned for their incredibly high costs of living and working, our very own London actually has the second highest office rent rates in the world, according to a recent report. The capital is trumped only by Hong Kong, where high demand and low availability are continuing to push rates further and further. Reports like these are leading many small British businesses to question how they can afford office rent in London.
Office Rent in London
Office rent in London, on the whole, is some of the highest in the world, but there is a significant difference in office rent rates across the city. It’s all about location. Small businesses requiring a premises in the capital may wish to avoid specific areas where office rent is either currently very high, or where office rent is expected to rise sharply within the near future. The areas that have the potential to increase office rent rates are those that are being turned into ‘hubs’, or ‘clusters’ for technology:
- Canary Wharf – Canary Wharf is being slated to be the next big ‘fintech’ hotspot in the capital. Recently, more fintech (financial technology) startups have been launched in Canary Wharf than anywhere else in London, including ‘Silicon Roundabout’ and ‘Tech City’. It is expected that office rent in Canary Wharf will increase by a whopping 12.8 percent during 2016 alone.
- Shoreditch – The growing technology sector in London’s Shoreditch saw office rent in the area rise by 24 percent in 2015, making it the fast growing part of the capital in terms of office rent. Office rent in Shoreditch is expected to grow by an additional 10 percent during 2016, with long term potential growth expected to see the area overtake popular areas such as Covent Garden.
- Midtown – Coming just behind Shoreditch in terms of projected office rent rises for 2016 is London’s Midtown, where businesses will be expected to hike out an additional 9.6 percent for office rent this year. Midtown was already looking to be one of the hottest areas for tech companies thanks to Yahoo!, but the recent arrival of Google’s offices have solidified this.
Options for Businesses
While area is an important factor to take into consideration, there are also other ways that small businesses wanting a London base can help to minimise their office rent costs. One of these options is to start thinking outside the box. Ask yourself whether or not you really need a traditional office space, or whether alternative business premises could tick all your boxes, such as coworking spaces, for example, or serviced offices. There has been a massive increase the number of businesses opting for more flexible, more modern working arrangements in the past few years, as more and more search for a suitable compromise – affordable office rent rates as well as a modern, accessible office in London.