Let’s cut to the chase; London is expensive. The thing is… it’s a global business hub where you can connect with people in your industry and really make a splash. Sound good? Well, before you start viewing available spaces, there are some important considerations you should make.
For example, London’s a big place. Where exactly would you want to be located? While there are bound to be places which aren’t as expensive as you initially thought, that doesn’t mean it’s cheap, and there might also be various hidden costs once you get into the details.
Let’s break it all down, working on the assumption that you’ve already decided you want to rent an office in the nation’s capital.
Location, location, location
First and foremost, you need somewhere that’s accessible – to clients as well as employees. This might seem kind of obvious, but it’s still an important factor to consider when assessing the suitability of a particular location.
On to the big question: which part of London should you choose to have an office in? Do you need footfall, or space, or both? Well, there’s no one-size-fits-all answer, as different areas are likely to benefit different types of businesses. It’s about knowing where you’ll get the most bang for your proverbial buck, and where your customers are.
To help get you thinking, we’ll take a look at a few of the most prominent districts.
City of London
While you might immediately think, “Finance,” this isn’t entirely accurate. In reality, 90% of businesses in the heart of London are small-to-medium-sized, and they also belong to a wide variety of sectors. An office here would of course be ideal for transport links, too. So don’t write it off!
The West End
As well as being a cultural hot spot, London’s famous West End is actually somewhat of a tech hub, being home to the likes of Sony Entertainment. It also tends to be a bit less intense than the city centre (what most people would call the finance district), but you’re still close enough to benefit from things like the great transport links.
Shoreditch
Well known for its hospitality businesses, Shoreditch also attracts start-ups in various industries (but especially the creative kinds). It’s a trendy location, and your employees will simply be spoilt for choice when lunchtime rolls around!
King’s Cross
Yes, this is where the Hogwarts Express departs from (if you know the right platform) – but that’s not why we’re recommending it as a potential location for you.
The broader King’s Cross area has been on the up for a number of years now, with it being one of the fastest-growing business districts in the city.
Here you can find such world-renowned businesses as Facebook and Google, and the iconic train station obviously makes transport a breeze.
What’s the difference between Grade A and Grade B office spaces?
Essentially, Grade A spaces represent the pinnacle of office accommodations and are often newly constructed or recently renovated to include state-of-the-art features.
Grade B offices, on the other hand, are more modest in terms of specification and price, typically costing at least 30% less than their Grade A counterparts. They also tend to older or previously used, as well as being located outside the most desirable locations.
How much will it cost?
The biggest factor is obviously how much rent you need to pay, and this is largely determined by the location of your office. For example, what we’ll call ‘prime’ areas like the City of London and the West End do tend to command higher rents than areas which are a bit farther out and therefore less accessible.
It’s important to remember that it’s not just the space itself you’re paying for; it’s also the location and what that location gives you.
Hidden fees and small print in office rentals
There are also plenty of hidden costs which can catch you off guard if you’re not careful. These include things like maintenance, renovation, and parking costs. You may even need to commute to your office via public transport, so there’s another possible expense.
Long-term affordability
If you’re weighing up new office space in London, it’s also important to think about long term affordability. Sales and costs tend to fluctuate, so have a chat with your accountant or take the time to look at cash flow and sales forecasts. While you want to invest in your business, think about what would happen if sales started to slow.
When considering a potential new office space, simply ask yourself if you could still afford it in worse circumstances than you’re in now. This safeguards against a sudden decline in your income, which is always a possibility.
Find more help with accounting and finance for your London-based business in our information centre.
