Office rental space is set to face significant development in the docklands area of East London, with Trilogy Property and LaSalle Investment Management promising 600,000 square feet of affordable office space.
The property developers have shown their proposals for the campus, which is set to be located at Republic at the East India Docks.
Robert Wolstenholme, Managing Director of Trilogy, indicated that the workspace will cost less than half what it costs to lease the same size space in the West End and The City, at less than £35 per month per square foot. The affordability offered by Trilogy will prevent young and small businesses from being priced out of the capital because of rental costs, which increase year on year.
He went on to explain that talent is very much wanted and needed in London, but sadly, many new businesses and large corporations believe it is just too costly to set up a base there and look elsewhere.
The heat map above shows just how costly it can be to rent out office space in the centre of London. We carried out some research into the prices of office rentals in Central London, and some cost as much as £1,000 per desk per month. For the majority of start-ups and small to medium businesses, this is just too expensive and can stop them from establishing themselves in the capital city.
The news from Trilogy is particularly welcome, given the report from Property Investor Today last month, which revealed a significant shortage of reasonably priced office space in the city.
Although over the past two decades the number of offices that have been built is unprecedented, and the amount of space that is currently under construction has doubled in the last 18 months, there is also a huge rise in the demand for workspace. Supply and demand are another reason why smaller businesses and those that are less established are being pushed even further out of the central London market.
Head of Commercial at Daniel Watney LLP, Richard Garner explained that while the figures for construction are great, it does not reflect the full picture. There is still a huge disparity between supply and demand in London, with businesses unable to afford office space. There have been many instances of former office blocks being turned into desirable housing developments, so secondary space is somewhat lacking. This has generally been space that was more accessible to SME’s.
He stated that Soho is a good example. The area, which has undergone significant development in the last few years, has seen many businesses in the creative industry move out of the area because of this - they just cannot afford the price of office space in these areas.
We hope that the announcement from Trilogy will signal a change in attitude across the capital.