The UK office market has emerged from the shadow of the Covid-19 pandemic over the last year and is strengthening month by month. The world of work has undoubtedly changed, but the office is still a key part of the commercial property landscape and will remain so for the foreseeable future.
Research from Avison Young at the end of 2022 show that availability fell for the first time since 2019 as take-up returned to healthy levels. The available office space in the UK’s nine biggest city markets fell by 7% last year, and there is only 4.1m sqft of new space expected to complete in these areas by the end of 2025.
Furthermore, market analysis from CBRE in January 2023 shows that: "Of the space under construction and due for completion in 2023, 35% has already been pre-let, and the anticipated high levels of demand for development space will deplete the pipeline further as the year progresses.”
This adds up to increasing competition for what is available. While research from Rubberdesk shows that the average price office rent in UK is £475 for a private office and £250 for a hot desk in a shared space, it is not possible to give a definitive average which covers every type of office.
What companies need from their office is constantly changing, and this has never been truer than in 2023. When looking for an office space to rent in the UK, these are some of the main factors which influence rents…
One of the most important trends in the office market is the rise of remote working. As more people work from home or in a hybrid fashion, location has become a more important factor than ever before. However, one of the main benefits of renting office space is that it gives your company a central location to gather and collaborate when needed.
This means that the needs of an increasingly remote, and possibly spread-out, workforce have come to have a greater bearing on what is needed from offices. Buildings which have great road access or which are close to transport links will be beneficial for your business due to the growing importance of convenience.
While rents in established business districts will remain high, this increased focus on connectivity and accessibility will open up more places as viable locations than before. Offices with good transport links will be attractive to many occupiers and are likely to be in high demand.
Related to location and accessibility is the potential for flexibility. Modern workforces need modern spaces, and multi-functional spaces are in huge demand. The flexibility of modern offices is a hugely appealing factor as it allows businesses to change and evolve to meet the demands of the workforce and meet the needs of agile working.
Flexible serviced office providers like FigFlex provide spaces which are designed to empower your business and workforce through flexibility. A focus on collaborative spaces which promote interaction and accountability gives you everything you need to inspire, motivate and build a vibrant, successful business.
By renting a flexible space like those provided by FigFlex, you can make it suit your needs no matter how they change in the future. A space which allows you to be proactive with layout and function can improve business growth, productivity and staff retention. Spaces which enable this level of multi-functionality are likely to see higher demand from businesses and increased rents as a consequence.
The rise of remote working has forced many companies to evaluate what working in the office really means, and how to make the office appealing to current and future employees. Workplace culture is a major factor in this, and a hybrid future means that offices with high quality amenities are likely to be in greater demand.
Examples of this include smart technologies, a variety of room types to suit all types of worker, and centralised spaces which drive social interactions such as lounges and hot desk areas. We are also seeing a rise in offices which go the extra mile to include facilities like gymnasiums and cafes for employees. Access to these types of amenities can make your employees happier and improve your business, but they will command a higher rent.
The climate emergency is changing attitudes in all areas, with people choosing the environmentally friendly option more and more. The world of offices is no different, and a company which occupies a sustainable working space will be more attractive and be more likely to secure the best employees.
Data from the Office for National Statistics shows that more than 80% of UK adults worry about climate change and think that everyone should do their bit to help. This means that office environments which use smart technologies to cut emissions, encourage recycling, have cycling facilities and other similar features will be more attractive.
Likewise, offices located in sustainable buildings will also be more attractive. This can mean a new build which has a high BREEAM rating, or a refurbished building which has retained the shell of an older building and retrofitted it into the 21st century. Upcoming changes to the Minimum Energy Efficiency Standards (MEES) will make these highly sustainable offices the cheapest to run, and therefore even more valuable to businesses.
Those are some of the most important factors which influence office rents in the UK. Buildings in convenient locations which are flexible, offer amenities and are sustainable are likely to command higher rents – but the advantages are well worth it for your business.
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