These are just some of the factors that are making the dynamics influencing the London office market more complex than ever, according Bilfinger GVA.
The real estate advisory firm has mocked up a Monopoly board showing London office costs and the different obstacles occupiers can "land on" – from the community infrastructure levy to the 2017 business rates revaluation.
Maxim Vane Percy, Senior Director at Bilfinger GVA, comments: “London’s physical, political, fiscal and regulatory landscape is changing. Evolving and improving connectivity, monetary policy, the mayoral election and of course Brexit form some of the over-arching macro-economic influencers."
"Conversely changes to stamp duty, the community infrastructure, the 2017 business rates revaluation, public realm improvements .... and the new minimum efficiency standards for 2018 are all simultaneously converging to present more opportunities and challenges to occupiers that ever before.”
The research, taken from Bilfinger GVA's London Office Occupier Guide, Mayfair & St James’s remains the most expensive place to take office space, where the total occupancy cost is £177.17 per sq ft, and as much as £212.27 per sq ft on "super-prime" space. Comparatively, the cheapest central London submarket is Stratford where total occupancy costs are £55.25 per sq ft.
Vane Percy said: “The cost of occupying space in central London is more expensive than ever before, with total occupier costs 36 per cent more expensive in the core West End markets than at the peak of the last cycle in 2007, with the City market 15 per cent above 2007 levels.”
Much of this is due to prime headline rents reaching record levels, which are at £70 per sq ft in the City and £120 in Mayfair and St James’s although this can be up to £150 per sq ft on super-prime space. Rates are substantially more expensive now than in 2007, 132 per cent up in Mayfair and St James’s and 60 per cent up in the City.