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London’s office market has always been a big deal. It is one of the busiest cities in the world after all, with hundreds of offices, and commercial property aplenty. But after Brexit there was talk of many international companies and investors pulling out to seek sanctuary in other places in Europe or abroad, because of Brexit’s new policies. But despite the scare tactics and general nay-saying after the Brexit vote, the London office market is still booming and proving to be resilient as ever.
2017 was, in fact, a particularly good year for office space in London, with leasing activity in central London resulting in approximately 13.84 square feet. This was an increase of 2 million square feet in comparison to the previous year: 2016. This info comes from a fairly recent report from Knight Frank, who also said that the reason for the increase in space was because of the high demand coming from London’s Technology, Media and Telecommunications sector. There were actually a record number of offices leased in London last year by firms that fell into the TMT bracket.
The office market is actually doing so well that there is concern that there won’t be enough space for new companies and companies which are looking to move. In order to accommodate the growing number of office spaces and general population, London needs to extend its CBD area. In London at the moment, there are 259 building plans underway. Of those 259, 187 of them are residential, leaving just 72 commercial plans. And one third of those plans already have leases in the pipeline. The majority of these commercial properties have plans only to be ready in 2020 so if you have a good office space in Central London, you should definitely hold onto it!
Prime Office Space is a company that has emerged by helping significantly in matching office spaces with companies and even individuals as they have created a vast portfolio of office space in London, to offer as co-working or general office space to their clients.
Although it was thought that many employees in London would be lost to overseas employers or other parts of the EU, the office market report has proved that not to be the case and it is thought that the rapid pace of job creation in London has somehow outweighed the leaving employees. There are still many overseas investors invested in London with offices and teams in the capital. In 2017, London sealed some highly important international deals with Deutsche Bank, GAM, Wells Fargo and Credit Agricole.
The supply and demand at the end of 2017 seemed to be somewhat in equilibrium as rents have remained, for the most part, flat. There are certain areas that have increased while others have shown weakness but in general the office market has been stable for London.
So despite the fear mongering, Brexit has had little or, if anything, a positive impact on London’s office market. It doesn’t seem like London’s going anywhere just yet. It is London after all.