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Fierce competition - predictions on London office market in a post-COVID-19 world

EG has reported that Michael Pain, head of tenant advisory team at Carter Jonas, has suggested that landlords in the London's office sector should prepare themselves to compete for fewer tenants in a weaker post-coronavirus market. 

This contrasts to the position we find ourselves in at the end of Q1 2020, where vacant office space is at a record low and rents have been growing across the capital. 

He suggested that businesses are likely to take a cautious 'wait-and-see' approach before committing to costly office relocations, each taking time to weigh up the impact the pandemic has had on the profitability and prospects for their business. 

Not mentioned but query also if the advances in and popularity of working from home during this period will have an effect on the way businesses view their need for desks in a physical office. 

Tenants wishing to delay a significant move may negotiate a short-term extension to their existing lease arrangements and most think landlords on the whole will be amenable to this. Where this is not possible, tenants may instead look to serviced office offerings. 

Where a business is confident coming out of the pandemic and in the position to make a swift move, EG suggests that they may find themselves able to strike deals on buildings that would have previously been considered too expensive.

“Businesses are increasingly likely to take a wait-and-see approach before committing to high-capital-expenditure projects, such as an office relocation, to see what impact the pandemic has on revenues and staff headcount,”

Tags

offices, sarah greene, commercial real estate, covid-19, landlords, tenants, london, coronavirus