Navigating London’s Office Market: A Guide for Businesses at Every Stage

Making the decision to move office is an exciting time in any company’s growth trajectory. Whether you’re a startup looking to take the first leap or a large corporation ready to find a place to settle for a while. However, finding the right office space is a decision not to be taken lightly. Studies have shown that a well-designed workspace, with good amenities, and an employee-focused approach to its features leads to improved productivity within a team. 

With trends leading toward more open-plan and collaborative workspaces, we have seen a shift in the requirements of businesses looking for their next space. More increasingly we find companies are looking for large meeting rooms, hot-desking areas, and welcoming breakout spaces. Having space for a team to distance themselves from their desk, helps with mental fatigue and boosts productivity. 

With all of this in mind, you’re likely wondering about how to make all of this happen, where in London is the best place to go, and if you've got the budget. The main factors that influence the cost of office spaces in London are: 

• Location

  • West End / Kings Cross areas are typically exceeding £900 per desk per month

  • Midtown / City / City Fringe / SE1 areas usually range between £700 - £1000 per desk per month

  • Outer boroughs (Camden, Islington, Hackney) tend to range between £500 - £800 per desk per month

• Type of agreement

  • Flexible spaces, such as serviced offices, often include all utilities, and their additional amenities. This and their flexibility in lease terms are often reflected in the price.

  • Leased offices usually come on a longer-term basis. So, while they are typically cheaper monthly, you’re contracted for a longer commitment term and are responsible for running the space. 

• Amenities and services 

  • Buildings are increasingly offering additional amenities and services in order to attract customers. This is usually reflected in the monthly cost. 

  • Amenities often include end-of-journey facilities, gyms, large communal areas, and free phone booths.

  • Some buildings offer additional perks, these often include fitness and wellness classes, seasonal building events, and well-stocked drinks fridges. 

• Office fit-out and customisation

  • Custom-designed spaces to fit a company's brand and needs will increase upfront costs. The length of the lease is usually long enough to account for fit-out time frames.

With all of these external factors influencing the cost of London’s office space market, it is vital to make the right decisions for your business. Taking too much space in the early days can cause unnecessary costs. Whilst not taking enough room during a period of growth can result in having to move multiple times in quick succession - another heavy hit to your bank accounts. Thankfully, the market has been built to service businesses in each stage of their timeline. 

• Startups (1-10 employees)

  • Coworking spaces: Offer flexibility, networking opportunities, and a vibrant atmosphere which is ideal for small teams. They provide all-inclusive utilities and amenities like internet, meeting rooms, and communal areas.

  • Serviced Offices: Provide fully furnished offices with flexible lease terms and additional services like reception and IT support, which are beneficial for small teams needing more privacy and a professional environment.

  • Typical Cost: £400 - £900 per desk per month (Variable based on location, building quality, etc)

Example London costs:

Coworking Space in Central London: £400 - £600 per desk/month

Example Cost: £500 per desk/month x 10 desks = £5000/month

Small Private Office in Shoreditch: £700 - £900 per desk/month

Example Cost: £800 per desk/month x 10 desks = £8,000/month

• SMEs (11-50 employees)

  • Serviced Offices: Continue to offer flexibility with the added benefit of scalability. Businesses can expand within the same building or with the same provider as they grow.

  • Managed Offices: These provide a middle ground with more control over the office environment compared to serviced offices, while still offering some flexibility and managed services. Managed offices can be tailored to reflect the company’s brand and culture.

  • Typical Cost: £4,000 - £100,000 per month (Variable based on location, building quality etc)

Example London costs:

Private Office in Hammersmith: £500 - £700 per desk/month

Example Cost: £600 per desk/month x 30 desks = £18,000/month

Managed Floor in Southwark: £800 - £1,200 per desk/month

Example Cost: £1,000 per desk/month x 30 desks = £30,000/month

• Medium-sized enterprises (51-250 employees)

  • Managed Offices: Offer a fitted and customised office environment with a level of service that can include reception, maintenance, and IT support. They provide more space and privacy for larger teams that could benefit from private meeting rooms. 

  • Leased Offices: For businesses ready for a longer commitment and wanting full control over their space, leased offices offer the ability to completely customise the space according to their specific needs.

  • Typical Cost: £100,000 - £500,000+ per month (Variable based on location, building quality etc)

Example London costs:

Whole Floor in Central London (The City): £ 700 - 1000 per desk/month

Example Cost: £900 per desk/month x 100 desks = £90,000/month

Office in Camden: £600 - £800 per desk/month

Example Cost: £700 per desk/month x 100 desks = £70,000/month

Leased office in Canary Wharf: £100 per sq.ft.

Example Cost: £100 per sq. ft. /month x 25,000 sq. ft. = £208,333 /month

• Large businesses (250+ employees)

  • Leased Offices: Provide full control and customisation options to align with the company’s branding, culture, and operational needs. Large corporations benefit from the stability and cost efficiency of long-term leases and can invest in significant fit-outs and amenities tailored to their workforce.

  • Typical Rent: Between £40 - £150 per sq. ft.  (Extra charges are applicable, such as: Business rates, service charges, IT, cleaning, etc)

Example London costs:

Entire Building in Central London (West End): £150 per sq. ft.

Example Cost: £150 per sq. ft. /month x 20,000 sq. ft. = £250,000 /month

Entire Building in Shoreditch: £73 per sq. ft.

Example Cost: £73 per sq. ft. /month x 30,000 sq. ft. = £182,500 /month

By making a carefully considered and informed decision, you’ll be ensuring your business can thrive in London’s highly competitive environment. At Kontor, we have a team of industry experts with unparalleled insights and experience in placing some of the globe's biggest names. We excel in supporting companies through every stage of their growth, with many of our clients starting with us as SMEs and continuing to come back to us every time they look to expand; even overseas. 

By Nenagh Acock Jones, Marketing Manager