Whilst many businesses are agonising over the pending Brexit negotiations, the commercial property market in London continues to remain strong. Recent reports show that the number of commercial offices being taken up by companies is the highest in 5 years.
Whilst many economists have been pessimistic with future property prices, the London market has continued to perform very strongly, with more than 14 million square feet being approved and taken by companies in the UK’s capital.
Amongst these offices, 27% have been taken up by firms in the technology, media and telecommunications sector, which is driving the start-up economy and further reinforcing London’s position as a start-up hub. The recent addition of Amazon’s headquarters in Holborn has likely contributed to this optimism.
An agent from creative property agency, Pilcher Hershman, explained “Creative marketing and tech companies are attracted to the energy of London and are always looking for spacious offices with high ceilings and natural light.”
The presence of Israeli start-ups is also very evident, with high profile start-ups in London including Payoneer, Gett, Taboola and Kaltura. The UK Israel Tech Hub that was launched in 2011 has now secured over £85 million worth of deals since it began.
This success of commercial property in London includes the ever-expanding popularity of creative workspaces and open-work offices such as Israeli-owned WeWork and other rivals such as Spaces and LABS, commonly used by start-ups and creative advertising agencies.
In workspaces, freelancers, small business and established businesses are able to rent office spaces or desks at very low costs and with flexible contracts. Customers are not tied down for long periods of time and it also appeals to companies that are expanding or going through growth periods, as they can add more desks and employees easily.
The seemingly never-ending Brexit negotiations will finally come to a conclusion on 29th March when the UK finally leaves the European Union. With the UK leaving the Euro trading area, there have been expectations of lower property prices and an expected recession to the country. However, the surge in popularity for office space shows more optimism than the experts suggest and who knows, maybe the country will be OK after all.