Hot property

Now is the time for firms looking for new office space to get bargains. Rent-free periods have increased sharply and with vacancy rates rising dramatically, landlords are desperate for tenants. Central London rents fell by 16.1% in 2008 according to agents CB Richard Ellis. This won’t last indefinitely, but firms are finding themselves with a rare window of opportunity, and many have been quick to recognise this fact.

Taylor Wessing and Allen & Overy have made two of the most recent big moves, in November last year and late 2006 respectively, with Addleshaw Goddard hot on their heels at the end of August 2008 and Reed Smith who began to move in March this year. Taking advantage of the situation seems obvious. But, when the world faces an economic crisis, do clients really want to see their advisers splashing out on swanky office space? With the current economic climate showing no signs of improving any time soon, the dilemma is likely to get tougher.

The financial downturn has led to take-up levels of new office space falling considerably. Couple this with rising availability in central London and it is little surprise that the capital has seen a serious drop in rents. This is great news for firms looking to move or renegotiate contracts. ‘If you’re looking for space, it’s the perfect time,’ says Imogen Moss, real estate partner at Allen & Overy. ‘There is a glut of space available on the market, a real oversupply compared with demand. Tenants are certainly in a good bargaining position.’

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