Firm says occupiers demanding higher standards of workspace in order to attract and retain staff
London is the second most expensive office fit-out market in the world only behind New York, a new report from T&T has said.
The report covers the rates from close to 60 cities with Edinburgh and Glasgow 21st, Birmingham 22nd and Manchester 25th for costs.
It said that costs in London are $5,827 per m2 with New York edging ahead at $5,886 per m2. Edinburgh and Glasgow at $3,859 per m2, an increase of 12%, Manchester at $3,666 per m2, and Birmingham at $3,857 per m2.
T&T said: “A key driver of the increase in costs has been the changing role of the office and increased demand from occupiers for higher quality, more amenitised and sustainable workspaces.
“With the normalisation of flexible working, businesses are working harder to encourage employees to come together, which means that an office now fundamentally needs to be more than just a place to work, it must be a home from home, a place to eat and drink, socialise, innovate, and bring people together.”
It said that in London the corporate occupier market is being led by a greater number of large-scale fit-outs, with major brands and international players looking for new bespoke space.
It added: “The financial and professional services sector in general is the top spender on new fit-outs, as companies look to retain talent by offering employees internationally competitive amenities and premium-quality spaces.”
T&T warned that the amount of Grade A space was dwindling putting the pressure on process further.
Nadia de Klerk, global sector sponsor and head of UK Occupier & Portfolio, said: “Occupiers from major global players in financial, professional and legal services to tech behemoths and start-ups are all competing in an international market for talent and investment. They must have top-quality office space which reflects their brand and ambition – but stock is running short.
“The Grade A capacity squeeze has intersected with a new world of heightened occupier demand and expectations. We’re seeing high-value requirements for amenities, welfare and highly-scored building standards in connectivity and sustainability – all contributing to ever-rising costs for high-spec fit-outs.”
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