Total office occupancy costs across the UK remained stable in the second half of 2012, according to new research by BNP Paribas Real Estate, the leading international property adviser.
The report, which focuses on a high level view of rents, rates and service charges for Grade A offices across the country over the last six months of last year, highlighted that costs only rose in three locations: Heathrow, where costs rose by 9.6% to £42.75 per sq ft, Birmingham City Centre, where costs rose by 5.3% to £44.25 per sq ft, and Midtown, where costs rose by 2.6% to £98.25 per sq ft.
The only UK location to witness a drop in total office occupancy costs was Gatwick, where costs fell by 4% to £37.50 per sq ft.
Unsurprisingly, occupancy costs remain the highest in Central London, with costs remaining stable in all locations apart from Midtown.
BNP Paribas Real Estate’s Central London MD, Dan Bayley comments: “It is unsurprising that occupancy rates have remained fairly stable across the country, as occupiers are still looking to secure good deals within Grade A offices. The recorded increases are mainly due to a rise in headline rents caused by recent deals, rather than other occupancy related costs.”
“Looking ahead, we expect 2013 to be another challenging year, with activity led mainly by lease events. The TMT sector is expected to remain active within London, helping to drive rents and take up in emerging office locations such as Clerkenwell, Shoreditch and the Southbank. The energy sector is also predicted to continue to be active across the UK, both within city centre and out of town locations. Overall across the UK, activity is likely to remain below historic levels, with professional services, specifically the larger accountants, leading activity,” concluded Bayley.