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For London’s office tenants, geography is an increasingly irrelevant concern, according to new data from Cushman & Wakefield.
More than half (57%) of office occupiers that moved in 2018 left their existing submarket, Cushman said in its Movers & Shakers report. The data looked at occupiers of more than 10K SF.
Cushman compared the figure to 2013, and found that office occupation is now much more geographically fluid, and occupiers are now much more willing to move some or all of their operations away from an existing location.
The average distance moved by London occupiers is now 1.23 miles and the direction of travel is predominantly east.
Mayfair, North Oxford Street and St James’s witnessed the greatest net out-migration of occupiers in 2018, losing 12, six and four occupiers, respectively. The City core experienced the greatest net positive balance, gaining 32 occupiers.
City core occupiers demonstrated the greatest loyalty to their submarket, with 53 out of 114 transactions (46%) originating from companies already located in the City.
“While recent availability in the City core and its surrounding submarkets has resulted in a significant inflow of occupiers, conversely, an enduring lack of stock in the West End office market is triggering a notable migration out of the area,” Cushman & Wakefield Head of London Markets Alistair Brown said in the report. “This outward migration has been further compounded by its traditional occupiers — from public & government, retail and media sectors — being amongst the most footloose in London and are prepared to consider London as one whole market to explore.”
Cushman said that as new office locations are opened up, like White City or Battersea, and those locations converge in terms of pricing, it will increase the geographic fluidity of London’s office occupiers.
Big companies to move include McCann, which is moving from Fitzrovia to the City; the European Bank for Reconstruction and Development agreeing to move its headquarters from the City to Canary Wharf; and Global Brands, which will relocate to White City from Marylebone.
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