London is a bustling city and if you are looking to set up business in the capital, you are in good company, with a staggering 1.1 million business calling London home.
Setting up a business here, and being successful here, are 2 entirely different things though. One of the biggest aspects you should consider, is where you should locate your premises? Choose an area too prestigious and you may drown in debt before you are even established. Locate yourself in the wrong district and your customers may not even find you.
It’s a decision that must be given a lot of thought, research, and consideration.
For quality office space, London has a range of business accommodation available. The monthly rental of a serviced office generally includes business rates, utilities, and cleaning, while the tenant will be responsible for telephone and Internet charges. Depending on the type of office space you are renting and the level of service you subscribe to, the monthly rental can also include things such as office furniture, the use of the breakout and meeting rooms, lunch areas, kitchens, and a manned reception area.
The prices across the city will vary massively, so it’s a good idea to form a comprehensive list of wants V’s needs before you even get started.
Why choose London for Office Space?
London has had great commercial growth and along with Tokyo and New York, it is one of the Top 3 global economic hubs.
There are a large number of companies in the UK that sit amongst the top 100 companies in the entire world. As there are so many businesses already established in the capital, prices can be highly inflated especially if you intend to be situated in a certain area.
London is, by and large, partitioned by industry sectors. The large financial institutions are located in the financial district, Canary Wharf, The Square Mile and Mayfair and they certainly pay a premium for it, as this area tends to yield some of the most expensive office rentals in the world.
Shoreditch and surrounds or Silicon Roundabout, as it has been named in recent years, due to the abundance of tech firms and startups, was once a cheaper place to set up shop. After the financial crash, firms were lured here with government incentives, but rent increases of late have seen the number of new businesses setting up here fall.
A booming sector in London is the creative industries. Estimated to be providing 1 in 6 jobs in the Capital and contributing over £47 Billion to the London economy. This success has led to the initiative of Creative Enterprise Zones. These specific areas will focus on the nurture and support of artists and creative businesses, helping them to secure roots in the city.
The creative enterprise zones include Croyden, Tottenham, Hunslow, Brixton, Lewisham and Tower Hamlets and this list is likely to expand, to other parts of the capital.
With the uncertainties surrounding Brexit and the country’s economy, the impetus is really being put on developing an industry that according to London Office Space is expected to create up to 1 million new jobs by 2030, and also to drive up entrepreneurship to record-high levels.
When searching for space, it can be beneficial to seek the services of a professional real estate agent that knows the London office market like the back of their hand.
They will be able to provide invaluable insights into government incentives and initiatives such as the previously mentioned Enterprise Zones. They can also advise on market trends, property hot spots, office occupancy ratios and any planned construction that will either increase or decrease property and rent prices.
The commercial property market has seen some drastic changes in recent years.
Retail space is less in demand, as consumers habits have changed. Idle space is now being repurposed for warehouse space, offices, or even residential units.
Shared offices, hot desk solutions, flexible working arrangement, and shorter leases have all become popular amongst not only smaller startup firms, but large blue-chip companies have also adopted a more collaborative approach.
Co-working space giant,WeWork has cashed in on the casualisation of work and the need for businesses to reduce their costs and space requirements, and is now the biggest occupier of office space in London, after the government.
The Coworking movement seems to be taking over cities worldwide and it’s happening at an astounding rate!
What once seemed like the perfect solution for a tightly budgeted entrepreneur to have access to a workspace, printing facilities and a meeting room now appear to have been rebirthed into a hip, modern membership program which is less about work productivity and functionality and more about wall murals and soy lattes.
Sure there are many of these workspaces that are integral to the businesses that occupy them. They can provide networking opportunities, mentorship programs as well as a safe 24/7 location for you to fulfill all your business needs, but as with all lease agreements, read the fine print, to fully understand what you are signing up for.
When making large investments, such as office space, it is advisable to shop around and make cost comparisons, to ensure that you are getting the best deal. If you don’t understand the lingo, don’t just wing it, seek the help of a professional.
If purchasing an office for your own business, be sure to take into account expansion plans, so that you don’t outgrow the space too quickly. You should also consider worst-case scenarios. If a deal falls through, a client opts for a different services provider,or if interest rates increase, will you still be able to afford the office payments. Don’t overstretch the finances and jeopardize the success of your business by splurging on an office that you can only afford when all targets are being hit. (Sometimes it’s necessary to take the ego out of the decision making process)
If you are skeptical about utilizing the services of a brokerage, do your homework first to get a thorough understanding of the market place. A Broker can often be advantageous as they may have properties available that you may not have found. They can also help with negotiations and explain any jargon that you may be unfamiliar with.
September 11, 2019