Office Sector Fails to Keep Up with Business Growth
Prompted by the recent boom of the so-called ‘micro-homes’ in Britain, commercial property experts Savoystewart.co.uk decided to investigate whether the ‘micro-trend’ has also taken root in the office sector as well.
- From 2012 to 2016, office floorspace in England and Wales shrunk from 41m2 to 34.4m2 or 16.3% relative to the number of active businesses
- The most dramatic decline in office floorspace per business observed in London (-23.9%); the least in Wales (-8.7%)
- Manchester experienced the most negative decline in office floorspace per business (-33.2%), Newcastle upon Tyne had the least (-13.1%)
Savoystewart.co.uk analysed office floorspace available relative to the number of active businesses in England and Wales from 2012 to 2016, finding that the office sector is failing to keep up with business growth both on regional and local levels.
Results of the research, which is based on the latest GOV data on business floorspace from the Valuation Office Agency and official stats on business demography from ONS, revealed that the change in office floorspace available per business has been negative in all regions. Despite a significant and steady growth in office floorspace, London experienced the most dramatic decline in office floorspace available per business. From 2012 to 2016, office floorspace per business in London fell from 58.7m2 to 44.7m2; equivalent to a decrease of 23.9%.
After London, the most significant decrease in office floorspace available per business was observed in the East of England (-17.8%), followed by the West Midlands (-17.1%), and Yorkshire and the Humber (-16.1%). Press Information for Immediate Release Savoystewart.co.uk
The least dramatic decrease was seen in Wales (-8.7%), followed by the East Midlands (-9.9%) and the South West (-12.1%).
Savoystewart.co.uk also analysed the change in office floorspace relative to business growth in major cities and towns across England and Wales. The most significant decline was observed in Manchester where office floorspace available per business shrunk by a staggering 33.2%. Despite Manchester dubbed as ‘the capital of the North’, known for some of the most spacious offices in England (77.2m2 per business), it comes secondary to Newcastle upon Tyne which offers an amazing 100.8m2 of office floorspace per business.
After Manchester, office floorspace per business shrunk the most in Birmingham (-27.6%), followed by Leicester (-27%), Liverpool (-23.9%) and Leeds (-23.5%). The lowest decline in office floorspace was observed in Newcastle upon Tyne (-13.1%), followed by Cambridge (-16.2%), Cardiff (-17.4%) and Bristol (-20.3%).
Darren Best, Managing Director of Savoystewart.co.uk commented:
“The results of the research don’t necessarily suggest that offices in England and Wales have physically become smaller; although there has probably been some downsizing in floorspace. Nevertheless, the overall negative trend in office floorspace available relative to the number of businesses is very concerning because it suggests that the office sector is failing to keep up with business growth. And if such a trend continues, I can see only one possible outcome – lack of offices and consequently, a substantial increase in prices no matter if a business is seeking to rent or buy.”
Kindly shared by Savoy Stewart