A property developer in London is set to shake up the office rental space by promising to offer “affordable” office space at a major new building in Docklands, East London.
Trilogy Property and LaSalle Investment Management has unveiled proposals for a 600,000 square feet office campus called Republic at East India Docks.
Trilogy’s managing director, Robert Wolstenholme, has confirmed that office space will be available at less than £35 per square foot per month, which is less than half of what it costs to rent the same area in the City and the West End.
He said that Trilogy will offer the more affordable space to stop young and small companies being priced out of London by the ever increasing rental costs.
He said: “There’s a war for talent in London, and we want to make sure it’s ‘priced in’ rather than priced out as we are hearing about some start-ups and major corporates thinking it is too expensive to work here.”
You can see from our heat map just how expensive it is for office space in Central London. Based on in depth research of office rental prices, we found that some places in London cost £1,000 a month per work station. This is completely unaffordable for small businesses and new start-ups, who probably feel they could miss out from not being based in London, so this should be an extremely welcome boost for them.
This welcome news comes only a month after Property Investor Today announced that there is currently a severe shortage in affordable office space in the capital.
The article explains that although new office space is being built at unprecedented levels in the past 20 years, with the amount of office space under construction doubling in the past 18 months, demand for office space is also on the rise. This means younger or smaller businesses are being priced further out of the London rental market.
Richard Garner, head of commercial at Daniel Watney LLP, explains it further: “While construction figures today are positive, they don’t tell the full story. There’s still a very real supply crunch across the capital with firms unable to access space they can afford. We’ve seen a large number of office blocks turned into prime central London housing, which has seen a decline in the supply of secondary space. This has been the space that is typically more affordable to small and medium sized businesses on account of being less well specified or not new.”
“Areas like Soho for example – which have been substantially redeveloped in recent years, have seen many creative companies leave the area as a result: they simply afford the increased rental prices in these premium areas.”
Hopefully Trilogy’s announcement will be the start of a change across the whole city.