In recent news, office spaces of become increasingly vacant throughout traditionally high-commerce areas of London, attributed to the credit crisis affect the world today. This troubling trend speaks volumes to the benefits of serviced offices and short term office solutions as the increase in vacancies correlates to the increase in these short term services throughout London and the rest of the world. In the city of London alone, the office vacancy rose in Q3 2008 to 5.5%, equaling about 5.7 million sq feet of empty office space.
The majority of vacancies are presumably coming from the liquation of assets from financial services and banking organizations that were hit hard with the worldwide economic recession. The property agents reported that these businesses made widespread moves from traditional offices to serviced office solutions, attributing to a 75% increase in the serviced office space market in March of 2008. This is coupled with a 50% increase in the telecoms renting industry, and a 15% increase in the IT industrial segment to illustrate the growing demand for economically-flexible serviced office solutions in uncertain economic times.
Whereas the office market rental values in London reached highs of GBP65 in 2007, property agents are now reporting that current rates in 2008 have fallen to GBP47.5 per sq foot. A sign of the credit crunch finally hitting the historically prosperous region, agent forecast that it will take upwards of 5 years to regain the highs achieved in 2007 for the office market. Of course, the lower cost of entry remains an attractive draw for new companies looking to find office space in previously-exclusive parts of London, such as North London or the West End office areas.
