The first quarter of 2008 has seen the slowest traditional office space take up in London since the emergence of the corporate market in 2004. The traditional office space demand has significantly fallen as troubled sectors such as the banking industry have begun cutting jobs. Some 11,000 job are predicted, which will be reflected in the take-up and exerting pressure on landlords.
Large corporates are starting to back away from committing to long leases and are now opting for more flexible short term solutions. In the City of London, there is a sharp fall in traditional office space deals, with take-up from banks and financial services companies dropping from 40% to below 10%. Financial institutions and banks are making a clear move towards shorter commitments in terms of office leases.
08.07.08 Richard Smith, Managing Director of SOS > Search Office Space, an agency specialising in serviced offices and business centres for over 15 years, comments as follows “In uncertain times such as these, the fundamental concept of serviced offices i.e. FLEXIBILITY, really comes to the fore. Tenants don’t want to sign long lease commitments, they want to be able to expand or downsize according to their business needs. They do not want to worry about dilapidations at the end of their stay, nor unexpected service charge/building maintenance bills during their occupancy - none of these concerns are an issue in a serviced office centre - these benefits are often overlooked but they are especially crucial in today’s marketplace.”
Written by Emily Mouquot, Marketing Director, Search Office Space, 09-07-2008
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