Older London offices could become a bargain
FOR the first time ever, London office rents are set to go in two different directions.
Rents for the British capital’s new and old office spaces have tended to move in tandem in the past. Yet demand for the best space is expected to push rents for those buildings up over the next few years, while second-hand offices may see falling rates, creating a two-tier market with big winners and losers.
Landlords with new buildings sporting the latest features can charge record prices even in a market fraught with uncertainty over Brexit. That’s because companies are increasingly focused on attracting and retaining staff whose expectations about what offices should look like have been raised by flexible-working companies such as WeWork and tech giants like Google and Facebook.
“In the last four years, I have seen the biggest shift in occupier expectations and thinking,” said Colette O’Shea, the managing director of the London portfolio at Land Securities Group, the UK’s second-largest real estate investment trust (Reit). “We are seeing it in every aspect of life. It’s all about quality and flexibility. People are prepared to pay for something that they think is good value.”