Contrary to what much post-Brexit referendum commentary has suggested, we have been hearing many positive noises about London’s commercial property market. In the first few months of 2017, European investors ploughed £1.7bn into London, signalling a confidence in the capital, writes Richard Kauntze, chief executive of the British Council for Offices.
However, no one should be too relaxed: high occupational costs, a dwindling graduate talent pool and the continual and rapid evolution of technology and its impact on how we work all have the potential to hamper London’s allure in the longer term.
Relocation to the regional cities, which boast lower rents, wages and reduced commuting times, is gathering momentum, and not just for back and middle office operations. Deutsche Bank now services 500 clients previously handled by the London office from Birmingham, across a range of functions, including debt, listed derivatives and equities.
Yet at the same time we have also seen some of the world’s largest companies – Apple, Google and Kraft – announcing new or expanded operations in the capital. Despite the uncertainty surrounding Brexit, London can continue to retain its reputation as a magnet for headquarters, thanks to the innovative grade-A office stock, connectivity, culture and global status it offers, but must work to maintain that competitive advantage.
The near future could see a model in which businesses expand their regional presence, while maintaining a headquarters in London. New transport links, such as HS2 and HS3, mean that employees will be able to travel with greater ease between locations. This has the potential to lead to a more balanced economy, relieving some of the pressures in the capital.
This new model also offers London an opportunity. This week, over 500 people involved in shaping the future of UK commercial property will gather for the British Council for Offices’ Annual Conference, fittingly themed “London Refocused”. The conference will invite delegates to question whether our industry is doing everything it can to make London the best place to work. It is only by doing this that our capital will continue to be a world class business centre for years to come.
