Rental cost has proved the key factor in the decision to acquire new office space in Central London, with energy efficiency and green issues cited as the least important factor, according to Knight Frank's Central London Occupier survey which questioned more than 100 directors responsible for real estate at some of the largest companies located within London's City, Docklands, and West End markets.
Rental cost has proved the key factor in the decision to acquire new office space in Central London, with energy efficiency and green issues cited as the least important factor, according to Knight Frank's Central London Occupier survey which questioned more than 100 directors responsible for real estate at some of the largest companies located within London's City, Docklands, and West End markets.
In light of the current turbulent market, 40% of respondents cited rental cost as the most important factor in deciding to acquire new space, whilst the retention of key staff came second with 20% stating that it was an essential factor. Despite much emphasis being placed upon green issues in recent years, energy efficiency was ranked tenth with respondents citing it as the least important influencing factor, followed by a higher building profile which was ranked ninth.
'Whilst the green agenda and sustainability issues are fundamental to the future of office buildings, our research has surprisingly shown that as economic markets suffer, such requirements become less of a priority to central London office occupiers looking to acquire new space: cost and retention of staff become key,' said Bradley Baker, head of central London tenant representation, Knight Frank. 'We forecast that once the markets return, occupiers will again focus on the importance of sustainability.'
Despite the current turbulent market, 38% of all respondents commented that they expected their organisations to remain stable, although 20% stated they were likely to downsize with an additional 7% anticipated to consider outsourcing and a further 7% likely to relocate back office functions. This cautionary tone in the market reinforces the awareness of occupiers of the effects of the recent economic downturn and the fact that property commitments are likely to come under increasing scrutiny in the coming months.
Key factors affecting the decision to acquire new space are:
1 Rental Cost
2 Retention of key staff
3 Lease Flexibility
4 Space efficiency
5 Higher quality environment
6 Occupational flexibility
7 Proximity to public transport
8 Proximity to clients\competitors
9 Higher building profile
10 Energy efficiency
