When starting to look for commercial property to rent, it’s always important to know what the average cost per square foot is, and this article aims to outline these costs in London’s most popular office space locations – the West End and the City. You will also look at what affects these costs and what the cost in square footage actually includes.
As of November 2010, commercial property rates of Tax Consultants in London in the West End could range from £50 to £70 per square foot for a first-class A space, but an average of around £ 65 is probably correct. For the city, it costs between £45 and £55 per square foot. The West End is typically more per square foot than the city, and “prime” generally refers to new construction or a completely renovated building in a prime location. For lower quality grade B buildings and locations, space is generally priced at about £20 per square foot less than grade space. Please note these prices listed are only a rough guide.
So what affects your square footage costs?
The three key factors are location, building specifications, and the shape of the floor plate. The main two, location and building specifications, are self-explanatory – the better the location and quality, the more tenants will pay.
The third factor, the shape of the floor plate, is interesting and relates to functional obsolescence. Today, businesses are looking for commercial rental properties that have deep enough floor plates that can be converted into open-plan offices. This is a reflection on modern work practices and the move away from cubic-style offices. Functional obsolescence comes into play when the floor plate is narrow and cannot meet the requirements of an open-plan office. This means that tenants are only allowed a narrow space for an open plan layout once they have set up their offices, so they do not get the maximum occupational density of the space. Besides this, there is also technical obsolescence, the age of mechanical and electrical installations (M&E), and these may include various building installations and wiring, etc.
What is included in the cost of square footage when looking for a commercial property to rent?
Unfortunately, not much – the square footage costs with aaaaccounting only cover the rent – is simply the payment for exclusive possession of death. It will exclude all running costs, repairs, all taxes, utilities, and liabilities, just to name a few. Generally speaking, businesses can expect to pay roughly double the rent for additional costs. For example, if tenants pay around £65 per square foot for a premier West End office space, they are most likely looking at around £120 – 130 per square foot, including rent, fees, and service charges, and all capital and operating costs.
Independent commercial property agents such as APM Property Consultants offer management and turnkey leases throughout Central London and the South East, providing clients with vital knowledge and experience related to the commercial property industry. APM Property Consultants currently markets more than 190,000 square feet of premier office space, the majority of which is located in the City and West End of London.