So you want to set up shop in London, the beating financial heart of the world.
First things first – you need to find an office space. From selecting a location, and budgeting, to considering transport connections, there are various factors to think about.
Don’t worry. We’ve prepared a comprehensive guide for exporters looking to rent an office space in London – including everything from rental costs to helpful tips.
This article at a glance:
There are many things to consider when choosing an office space in London – the location and its amenities, your budget, and how much space you will need. You need to engage with a commercial agent who has access to a wide pool of information and consider the type of message you want to send to potential clients.
How much does it cost to rent office space in London?
It all depends on where you want to be. Any Londoner will tell you that London isn’t simply a city – it’s a sprawling collection of little towns, all varying in rental prices.
According to Statista, the average cost to rent an office in London is as follows:
|Area||Price per square foot|
Choose a location
Expecting to host clients regularly? Begin by shortlisting locations that are convenient for your employees, suppliers, and clients.
Consider the following:
- Is the office easily accessible by public transport?
- Are there allocated parking facilities? Otherwise, where are the nearest parking spots?
- What is the condition of the building – both internally and externally?
- Are there loading and unloading bays for delivery personnel?
- Are there amenities nearby, including recreational spaces, pharmacies or restaurants?
What’s the aim of your office?
Before embarking on the search for your dream office, take some time to establish what you want and need in your office space.
- How often will your employees be coming into the office?
- Will you be hosting daily team or client meetings?
- Do you want the office to be situated near your home or your clients?
- What first impression do you want your office to give?
- Can your office space accommodate business expansion soon?
These answers will streamline the office hunting process, allowing you to evaluate your options with greater clarity.
How much space do you need?
Space is crucial to making an office functional, but how do you know how much space you will need?
Start by listing down your company’s daily operations. For example, a reception area may be useful if you foresee frequent client meetings.
In London, the general rule is 100 sq. ft. per employee. This includes accommodating an estimated 50 sq. ft. for desk space and another 50 sq. ft. of room for communal areas like meeting rooms, breakout spaces, and kitchens.
However, high office rental prices in London mean that many businesses go for the more cost-efficient ratio – an estimated 70 - 80 sq. ft. per employee, meaning that spaces have to be used more efficiently, with solutions including using benches as a communal work desk and minimising storage facilities.
You will also need extra amenities, such as kitchens and meeting rooms. Consider the following:
|Reception or waiting area||~4 people||80 sq. ft.|
|Pantry||~5 people||100 sq.ft.|
|Conference room||20 - 30 people||300 sq.ft.|
|Boardroom||15 - 20 people||220 sq.ft.|
|Small meeting room||2 - 4 people||100 sq. ft.|
|Big meeting room||4 - 8 people||150 sq. ft.|
|Small server room||Up to 5 racks||40 sq. ft.|
|Big server room||Up to 30 racks||120 sq. ft.|
Co-working and shared office space
With the COVID pandemic changing the way we work, co-working and shared office spaces have become increasingly popular in London.
If you are looking for a short-term lease, co-working and shared office spaces will be significantly cheaper than your usual office lease. All you have to do is to lease rooms and simply move in. This saves you the trouble of spending money on things like office furniture.
Co-working and shared office spaces provide flexibility for when the team grows. Instead of searching for new office space, you can simply lease more desks to accommodate the expansion.
If this option sounds good to you, the below platforms can help you find a co-working or shared office space:
Private office space
There’s no one-fits-all solution. A co-working or shared office space may not work for you if:
- You require warehouse space
- You frequently host clients
- You require your space to reflect your corporate branding
If that’s the case, you can begin your search for the perfect office space here:
Arrange for viewings
Engage a commercial agent – they have access to a wider pool of information than you, and can organise viewings on your behalf and provide information on the spaces that fall within your requirements.
Sometimes online photos are misleading. Arrange for viewings to make sure that you’re getting what you’re paying for.
The Office Condition
- Is there natural light? Artificial lighting can negatively impact mental health.
- Does the office provide all the equipment you require?
- Does the office have an open floor plan, or is it separated by cubicles?
- Do you need 24/7 access to the office?
- Does the building have security measures in place?
- What are the office surroundings like? Are there nice local restaurants and cafes? A decent park for lunchtime strolls?
Submit your offer
Submit an offer to your commercial property agent – they will pass your offer on to the landlord. After reviewing your offer, the landlord will negotiate the lease terms with you. Remember, they don’t have to consent to all your terms. However, your commercial agent may be able to persuade your landlord to have a wall knocked down.
Upon agreement, request for the listing to be removed from all platforms. This helps to safeguard your interests and ensure that the landlord agrees to your offer instead of yielding to higher offers that may stream in.
Keep in mind that this offer – also known as the 'Heads of Terms' – is only legally binding when both you and the landlord have signed the tenancy agreement.
Draw up a tenancy agreement
Now sign the tenancy agreement. This is a legally-binding agreement laying down the terms and conditions of the tenancy contract. Check the following:
- What is the length of the lease?
- Are there any break clauses?
- How much is the rent? Are there any rent-free periods?
- When and how will the bills be paid?
- When and how will rent reviews be made?
- Do you have access to shared facilities within the floor or building?
- How much are the service and maintenance charges? What do they include, and whose responsibility is it?
- Can you sublet the premises?
- Are there options to renew the lease?
Seal the deal
Once you have prepared the down payment, you will exchange contracts. This deal becomes legally binding, and the deal is completed when the balance amount is paid. If any parties breach the stated terms, the other party can file a compensation claim based on the tenancy agreement.
Do your research
While it is tempting to rush into setting up your new office in London, take the time to do your research and ask questions before arriving at a decision.
Have one less thing to worry about
You don't have to be alone on this journey. No matter the size of your business, we have solutions tailored to your needs. Manage your business finances effortlessly too with our Silverbird online business account.
Author: Melissa Yeo
Illustration: Kate Faldina