Prices for offices vary wildly in London so it can be pretty tricky figuring out a budget for your new space. The best way to do so is to take a look at the market and play about with what you can get by varying your parameters. However there are some basics to consider and these are what we'll cover in this handy little guide.
What you need to know to arrive at a budget
These might seem fairly obvious, so we apologise if we're teaching you to suck eggs, but there are a few key things that you need to have clear before you can come up with a budget for your new space. These are:
- A location (see our guide on how to pick a location here)
- The type of office you want (we've got a guide to this here)
- The capacity the office needs to be able to hold (here's some help on how to work this out)
- A basic idea of the features you want your office to have
Average price per desk in London
The average price per desk in a serviced office varies significantly based on a wide variety of factors but according to our latest data (August 2021), which we've benchmarked against other publicly available sources, the average price per desk in London is as follows:
- A private office: £500-700 per desk with the Docklands area being the cheapest at around £400 per desk and Mayfair being the most expensive at around £1000 per desk.
- A coworking space: £300-400 per desk with the Docklands area again being the cheapest at around £200 per desk and Banks being the most expensive at around £450.
As you can see, prices vary enormously so it's worth understanding the variables before figuring out your budget.
What make prices vary so much
There are lots of things that influence the price of space, these include:
- Location - this is the main driver of price fluctuation. Simply put, popular central areas with good amenities and fantastic transport links tend to cost more than those that don't.
- Availability and demand - like anything, prices fluctuate based on demand. When serviced office buildings are being largely left empty, providers are willing to drop prices to attract customers. On the other end, when buildings are full they raise their prices.
- Type of office - there are lots of different types of space available (see our guide here) and they vary a lot in price. Here are the main ones in price order from high to low: Private serviced office, managed office, fixed desk (co-working), hot desk (co-working).
- Sq ft per desk - this is one that might not immediately seem obvious but while prices are usually based on a desk price the size of that desk varies a lot from one provider to another. One provider/building might offer 35 sq ft per desk, whereas another might offer 80. This has a significant impact on your experience in the office and will be noticeable when you go on your viewings.
- Fit-out cost per sq ft - along the same lines as the previous point, no two providers offer the same experience in their offices and therefore how much they spend on fitting out their buildings varies considerably. Some providers choose to focus on high end fit outs with expensive sound proofing technology, specialised lighting, bespoke furniture and amenities like a roof terrace or a wellness studios, while others choose to keep costs down with a cheaper fit-out.
How to get a feel for market rates
The best way to do this is to simply shop around. We've built our site to make it as easy and intuitive as possible to find spaces and compare prices. We'd recommend using our price filters to see what you can get for different amounts and to get a feel for what the average price will be for your search criteria.
Once you have an idea of the market rate, it's worth compare this to the budget you have set yourselves based on your own revenue and cost projections. If they are roughly aligned then all is good. If not, you might need to change your parameters or look in a different area to find something more appropriate.
One thing to remember when browsing is that all the prices you see are list prices and there is always a negotiation before agreeing the final terms. It is not uncommon to see providers drop prices 10-15% from the list price, although this very much depends on availability of space within the building you are interested in.
Want to get a better sense of the market? Start browsing now using our handy search tool.