Presentation to Richmond Rugby Business Club on Monday 27th February 2017, by Andrew Pollard BSc FRICS director of Bonsors, Chartered Surveyors and Commercial Property Consultants based in Kingston and covering South West London, Middlesex and parts of the Thames Valley.
... Richmond upon Thames
A great place for a business to be located in an historic and attractive environment.
It’s leafy and with a village feel. It overlooks the River Thames. There are some lovely shops, restaurants and bars in the area.
It has good transport links to central London. The M25 and the M3 plus Heathrow airport are easily accessible.
You pay a premium for your rent. Office rents in Richmond are significantly higher than in Teddington, Twickenham or Kingston upon Thames.
In some cases rents can be double. If you haven’t renegotiated your rent review recently or your lease renewal is due in the next year or so, you could be in for a shock.
Areas with a tube link command higher rents which means office space in both Richmond and Wimbledon, located at the end of the District line, are more expensive.
However, it’s not all about location. Since 2013 we have seen a proliferation of permitted rights planning consents where developers and landlords were able to convert offices to residential use without the need for formal planning consent, thereby increasing the value.
Richmond, as a sought after area with its tube links to central London, has been a prime target, although much of South West London has suffered a loss of office floor space as a result.
As we all know, when there’s a lack of supply due to very limited development of office floor space, but demand remains high, rents and capital values increase.
So, how much are we talking?
Most commercial rental agreements are for five years. If your lease began in 2012 or 2013, you would have been paying around £30 per square foot for top quality office space in Richmond.
You can now expect to pay £40-£50 per square foot for Grade A space. If your lease is due to end next year, the current trend is upwards. You are highly likely to have to pay more. By comparison, office space is currently around £25-£30 per square foot in Kingston, Teddington and Twickenham.
What can you do?
You can move! Although that’s not your only option.
If you are due a lease renewal or rent review, getting in the experts to undertake the negotiations for you is time saving and potentially cost saving. Even if you can’t reduce the rent, it is likely that whoever acts for you may be able to negotiate a shorter term lease or a break clause during the term.
But don’t rule out a move to somewhere less expensive. Twickenham and Teddington are just a few miles down the A316 and Kingston is just a quick hike across Richmond Park.
They may not have tube links but all have regular overground services into the capital and although a few years away, Kingston will be a stop on the new Crossrail 2 development.
And as much as I love Kingston, it’s where my office is located, and I don’t want you all moving there or we will have no space left to let!
Think outside the box
There’s a growing trend, which we’ve covered extensively on our website blog, for flexible work spaces. Popular with start-ups, Google Campus in Shoreditch is perhaps the obvious example where you can rent a desk and meeting rooms for a few hours, a day or on an on-going basis.
We are already seeing hubs appear outside central London – the old Telephone Exchange building at St George Plc’s new Post Office site development in Kingston upon Thames is earmarked for an ‘incubator hub’ and it wouldn’t surprise me if Kingston University created a similar space to encourage start-ups among its students.
If you have a few years to run on your lease but your business has outgrown your premises, flexible working could provide the answer. There are no moving costs and you won’t be faced with higher rents demanded by the current market.
Your employees will probably enjoy working in a different and very contemporary atmosphere and they may well make valuable business connections.
If you have any commercial property issues that you would like to discuss please contact:
Andrew Pollard BSc FRICS on 0208 546 0022 – email@example.com
Kieran McKeogh on 0208 546 0022 – firstname.lastname@example.org