Driven by the need to adopt a more cost competitive trading position post-Brexit together with evolving work practices, many London-based businesses are starting to reassess their accommodation requirements, with the Thames Valley in mind. Guy Parkes, partner at Reading-based property consultancy and UK Property Forums sponsor, Vail Williams LLP, discusses the rising exodus of teams from London out to the Thames Valley.
Changes in working practices are leading many companies to take a fresh look at the best places to locate their businesses in 2020.
Not only do they need to attract from the widest talent pool, but many are seeking to cut costs and increase business efficiency to ensure competitive advantage in a post-Brexit world. And the Thames Valley is likely to benefit as a result.
Once the Elizabeth Line comes fully into operation, it will make it easier for businesses to gain access to a broader and cheaper talent pool from the Thames Valley.
But with much of their existing talent already commuting from towns such as Reading, Slough and Maidenhead, we could see an increasing number of firms choose to decentralise their teams away from central London to the region, increasing the number of property deals being done there as a result.
Within just half an hour of central London, the Thames Valley boasts rents which can be up to 50 per cent less than what you would expect to pay in central London, with those for Grade A offices between £37.50-£39.50 per sq ft in the Thames Valley.
By comparison, a desk at an office in Bond Street, London, can cost upwards of £1,130 per month, while in Reading, you can expect to pay somewhere in the region of £390 per month for the equivalent space. The potential savings are significant.
And with a good range of quality office stock already available across the region at places like Winnersh Triangle, Dakota Weybridge and Thames Valley Business Park, as well as new stock due at Station Hill in Reading and The Landing in Maidenhead, it’s easy to understand why the Thames Valley is attracting the eye of the London-based business.
We are already seeing the transition of companies looking to locate further west, tempted by cheaper rents on offer in the Thames Valley, particularly occupiers in places like Hammersmith where rents have reached close to £60 per sq ft.
Into 2020, we expect to see an increase in the decentralisation of less London-centric teams, like IT, sales and marketing, to the Thames Valley where staff costs and outgoings are lower but where the talent pool is much stronger, particularly for disciplines such as IT.
But it’s not just about the bottom line.
With an ever-increasing focus on the health and wellbeing of their people, businesses would be wise to take advantage of the benefits of reducing potential commutes for staff, already based in the Thames Valley, with a move out of London.
Not only will it save time and enhance employee wellbeing for those already commuting from the Reading, Slough, Maidenhead area, it will lead to better motivated people and increased productivity.
And, if trends from 2019 are anything to by, more agile working practices will see the continued prevalence of smaller office deals as corporates take, on average, 2,000 sq ft less office space compared with last year.
This will result in smaller units and workshops coming to market, offering a more co-working style of serviced space on more flexible terms, including an exciting new scheme we are working on with Arena Business Centres, which is expected to come to market in Reading soon.
If you are looking to make the move out of London to take advantage of the benefits of locating in the Thames Valley, Vail Williams’ agency team can help to identify the right opportunity for you.
* Images: A graphic by Vail Williams to illustrate the savings possible for occupiers in London if they go west. Below: Guy Parkes.
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