Report Shows Six-Month High for Workstation Costs in Central London

Although a large number of new centers entered the market in the past 12 months, pressure on serviced office supply levels remains high.

UK-based officebroker.com released a report yesterday indicating a six-month high for workstation costs in Central London. According to the report, January revealed a substantial increase in the peak prices in Central London’s serviced offices, suggesting the beneficial squeeze taking place on commercial supply has also begun to affect the serviced office market.

The report shows that the peak cost of workstations in Central London’s serviced offices jumped to £978 in January this year, marking the highest monthly prices recorded in over 12 months and a significant increase on the prices recorded in the previous six months.

The increase follows a string of reports showing increased activity within the commercial property market, with a flood of large deals cutting into the limited supply available within Central London.

Managing Director of officebroker.com Jim Venables explained that the city's executive suites providers have benefited in a way similar to the way the dwindling supply has handed power back to commercial landlords, pushing prices back up.

“As a broker, we are starting to see enquiries from large corporate firms making a comeback," Venables said in a press release. "Many of our larger clients require project space, and the recession put a lot of projects on hold – but now that business confidence is being restored we are seeing a rise in the number of enquiries coming in from corporate clients."

Although a large number of new centers entered the market in the past 12 months, pressure on serviced office supply levels remains high. 

According to officebroker.com, the number of new office business centers in Central London increased by 78 during 2009, an expansion that was helped by the low commercial rents of that year.

officebroker.com has confirmed a number of corporate clients in the process of securing 75+ workstation deals and looks at the January price jump as a good indicator of the return of growing workstation costs in London’s serviced office market.  

However, their report warns that if the upswing witnessed in commercial property has been reflected in the serviced office market, the warnings that have accompanied the property rally may also apply.

A full analysis of how the Central London serviced office industry has faired during Q1 will be published by officebroker.com in April.