The London business footprint - mapping change in the office market

The London Business Footprint is a series of reports which have been released by the Deloitte Real Estate Insight team over the next 12 months, exploring the central London office markets from a business perspective.

For our first report in this series we have analysed the records of over 18,000 businesses located in central London. The dataset covers three points in time (2004, 2009 and 2014), allowing us to see how the characteristics of the offices that businesses occupy have evolved over the past decade

What has changed over the past 10 years?

  • Traditional industry hubs are being challenged – in almost all central London submarkets, the mix of businesses is becoming more diverse
  • The way space is used is changing – serviced office space has doubled in the City
  • ‘New’ growth sectors are emerging – the education sector’s presence increases as more universities locate in the capital
  • Government has fewer offices – space leased to government has declined by over a quarter
  • Technology is leading growth in the East – tech firms’ share of City office space has risen by 76%
  • Corporates move in – corporates’ share of central London offices has increased by 13%

The results show that during this time, businesses in London have changed the amount, type, quality and location of office accommodation that they require: in all of these respects, the space they have today is different to that of ten years ago. We then use these findings to outline what we believe are the main drivers for further change in the market.

What are some of the drivers of change we expect over the 10 years?

  • Infrastructure improvements will elevate the attractiveness of non-core office locations
  • Business diversity will continue to increase…
  • …boosted by a shift in the sectors driving demand for space
  • The office will play an increasingly important role in the battle for talent

An understanding of how and why the market is evolving is vital, whether for developers seeking to build the most desirable product, for investors gauging tenant demand, or for businesses wanting to provide attractive working environments for their staff. This report provides an overview of the key trends present in the market today, while subsequent reports will look at individual sectors in more detail.

London Business Footprint - Mapping change in the office market
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