February 1, 2018
Rent falls due to Brexit and concerns about oversupply of serviced offices in London
There have been 18 months of faltering net effective rents within the commercial office market in the Capital since the Brexit referendum, with ten of the 18 Central London office submarkets monitored in Cluttons’ latest London Office Market Outlook report registering rent falls in the final quarter of 2017, buoyed by additional incentives such as contributions to fit out costs and even delayed completions becoming commonplace in many locations. The report also raises concerns about the potential for an oversupply of serviced offices within the Capital. However, despite this and a perception that Central London offices are currently fully prices or possibly over-priced, by both occupiers and domestic investors, London remains a resilient city, continuing to attract high volumes of overseas capital. Employment growth is of course expected to be influenced by both the levels of GDP growth during 2018 and the Brexit divorce proceedings, which in turn will affect rental values. But says the report, aside from concerns over Brexit, there is no evidence from recruitment agencies to suggest a current, or planned exodus of finance and banking professionals from the City.
Financial services organisations are reducing the amount of commercial office space they require as they adopt more flexible work styles. This is according to a new report from HOK’s US team, 
Chilly offices mean that over half (57 percent) of office workers say they’d be more productive working from home when the weather gets colder. Their main reason is that too many workplaces (50 percent) do not handle weather complaints effectively. According to Office Genie’s survey of 1,105 British office workers, only 6 percent of employers encourage staff to work remotely in the colder weather. Bosses are also reluctant to let employees work flexibly instead of freeze, with only 16 percent of companies adopting flexible working patterns in the colder months. Even simple provisions such as supplying additional heaters are not in place in 70 percent of offices – failing to comply to the government’s Health and Safety Executive’s advice. Of the 1,105 office workers we surveyed, 50% said complaints about office temperatures aren’t dealt with effectively by management. And while HSE guidelines state workplaces shouldn’t dip below 16°C but when we asked workers their ideal office temperature, 20°C was the resounding answer.
