13 May 2019/ Guides

Tenant guide: How much is rent for an office space?

The UK economy is both highly diverse and essentially monocentric at the same time. London isn’t just the capital, it is by far the largest city, and has a hugely magnetic effect on the rest of the country economically, politically and culturally.

Aside from the obvious benefits of being in the heart of the powerhouse, with all the connections and opportunities this brings, life in London doesn’t come cheap. Compare office rentals in the capital with regional cities in the North, the Midlands, Scotland and Wales and the difference is remarkable.

But take a closer look and within these secondary and tertiary cities there are also major variances. The urban centres of Birmingham, Manchester, Glasgow and Edinburgh all have their centres of business, which are growing. There are pockets of major urban development all over the country, and with every crane that goes up, rental prices rise.

Not to mention the major modern shift in office rentals – co-working. This innovative newcomer to the commercial property market has transformed the office sector, providing new options for tenants and a whole new tranche of rental pricing to consider.

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The Big Picture

 

Property consultancy Cushman & Wakefield’s office market snapshot in the fourth quarter of 2018 lays out rental figures in black and white. Unsurprisingly London topped the bill – prime rentals in the West End came in at £110 per square foot, followed by the City of London at £67.50.

What was more surprising however was that in second place was the city of Reading, which saw a big spike in rental values in the space of 12 months, taking prime rents to £38.50 per square foot, ahead of Edinburgh (£35), Glasgow (£32) Manchester (£33.50) and Birmingham (£34).

Which proves that to understand the true picture of rental prices in the UK, it’s also essential to know which cities and towns are showing the biggest change in office rents. Savills’ commercial property market snapshot report, published in March this year, revealed which cities were showing the biggest office rental increases, and where rents are falling.

Stimulated by large-scale developments in the office markets, Brighton with 6% growth in 12 months topped the list of rental increase, followed by Oxford, Nottingham, Bristol, Manchester and Cambridge. London as whole may have remained roughly static over the year, but certain areas of the capital, such as Hammersmith and the Docklands, actually saw rents fall. 

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City snapshots

 

Prime rental prices tell you the top end you are likely to pay in each city, but the lower end of the market could be four or five times cheaper than this so it’s important to research the full price range.

Using a combination of Realla’s own search portal and market data pages, and research from serviced office provider Instant Offices, here’s a breakdown for the seven major cities based on what you can expect to pay for conventional and serviced offices:

 

London

  • Conventional office rent (psf) spread: £2 - £108
  • Average conventional office rent (psf): £47
  • Instant Offices estimate (per person per month): £650 - £1500

 

Manchester

  • Conventional office rent (psf) spread: £7 - £34
  • Average conventional office rent (psf): £20
  • Instant Offices estimate (per person per month): £300 - £400

 

Bristol

  • Conventional office rent (psf) spread: £13 - £30 
  • Average conventional office rent (psf): £20
  • Instant Offices estimate (per person per month): £350 - £500

 

Leeds

  • Conventional office rent (psf) spread: £8 - £30
  • Average conventional office rent (psf): £20
  • Instant Offices estimate (per person per month): £200 - £450

 

Edinburgh

  • Conventional office rent (psf) spread: £8 - £30
  • Average conventional office rent (psf): £20
  • Instant Offices estimate (per person per month): £250 - £550

 

Birmingham

  • Conventional office rent (psf) spread: £8 - £32
  • Average conventional office rent (psf): £19
  • Instant Offices estimate (per person per month): £250 - £450

 

Liverpool

  • Conventional office rent (psf) spread: £7 - £35
  • Average conventional office rent (psf): £15
  • Instant Offices estimate (per person per month): £150 - £300