Shortage of Prime Office Space Reported in London

The steady rise in popularity of prime London office space has come to a crux early this year. There is a shortage of office space in the UK capital, as was already being widely reported towards the end of last year. The shortage has now turned global corporations into fierce competitors for coveted professional addresses. The Need Office Space? blog reports that many of these corporations are having to settle for locations beyond their first choice.

“Companies, including Royal Dutch Shell, Google and Bloomberg are among those working with severely limited options as a result of a 2-year drop in new building developments during the economic downturn,” Ben Humphries writes.

“This shortage is not expected to ease in the near future; with estimates by real estate agent Knight Frank suggesting that only 6 developments in the city with in excess of 200,000 square feet of office space will be completed by 2012.”

“A flurry of major office lettings in the last three months have boosted London’s office market,” a recent Cushman & Wakefield report says.  Guy Taylor, head of West End office agency of Cushman & Wakefield said, “2010 will see a supply led recovery although demand for West End office space is also up by 50% since January.”

Servcorp, the world’s second largest serviced office operator, opened on January 7 this year in London and is now a part of the growing executive suites market there.

Officing Today’s Finance Editor Jonathan Price recently offered a glimpse into the future of the UK serviced office market. He urged business center operators to work with clients: “…it will be even more important to choose the best location for a business centre; avoiding locations where workers have to commute long distances by car is a good idea, and second, business centre operators will themselves have to be flexible in terms of what they offer to their customers, and ready to adapt to changes in both what clients want and who the clients are.”