London office prices reach record low of £600 per desk in 2022

Rubberdesk’s new London Flexible Office Report reveals that although office space prices showed promising signs in the first half of 2022, rates quickly tumbled in the second half.

Inflation, rising interest rates, the war in Ukraine, and market anxiety all contributed to prices dropping to their lowest level in three years – £600 per desk – before recovering slightly to £635 by year-end.

The report details that office space in Central London continued to lead the way with median prices reaching £700 per desk. Popular areas such as SOHO, Holborn and Fitzrovia are driving this demand, offering a wide range of premium office spaces.

Jim Groves, Rubberdesk CEO, commented: “Throughout 2022 Flex office space filled and occupancy steadily increased as more businesses returned from home or exited leases and looked for new premises. Agility and scalability were recurring themes from tenants as businesses faced volatile markets and uncertain conditions. Quality was another key requirement of tenant briefs where the benefits of the office plus the commute needed to exceed the ease of staying at home for employees.”

The report also highlights that London’s East End offers great value for money with monthly desk rates of £663 and £650 in Shoreditch and Aldgate seven per cent lower than the median rate in Central London.

West London’s Hammersmith and Fulham area also provides a wide variety of offices within close proximity to the city at an even more competitive price of £450 per person per month. Meanwhile South and North London both offer cost-effective options with a median desk rate of £270 and £395 respectively.

Influx of new workspaces

Amidst a 24 per cent decrease in office availability since January 2022, London has also seen a significant influx of new workspaces throughout the year, including The Office Group’s Black & White Building, Central London’s tallest mass timber office building, as well as new offerings from Storey, Workpad, The Boutique Workspace, Foraspace and over 30 other operators.

Groves also stated that in 2023 he expects to see “more first-time Flex tenants, a continued flight to quality, and with that a rise in price in the most desirable locations”.

Key Findings:

– Office rates slide 3.4 per cent in Central London

– City of London office prices hit new low in 2nd half of 2022

– Office prices in Aldgate and Canary Wharf in East London are up over 10 per cent

– Office availability in South London increase 15 per cent with median rates of £287 per desk

– Rates across West London down 6.5 per cent year-over-year

– North London prices climb 5.3 per cent in 2022

To download the full report click here.

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