The Cost of Office Space in London 2023

Sustainable property was one of the leading trends driving tenant activity in the second half of 2022 and this is expected to continue in 2023. There is an increasing demand for large corporations to achieve their ESG goals and embrace more sustainable practices within their business operations.

There will be many large and medium-sized organisations that have occupied their office space on long-term leases that now need their space to meet certain credentials. With older properties not up to the correct standard, they are looking to move to benefit from newer buildings. On top of prioritising sustainable building credentials, all new buildings in London need to be net zero by 2030. The Net Zero Carbon Buildings Declaration extends to all existing buildings also being brought up to standard by 2050.

This will shape investment activity with asset managers wanting to secure properties with the correct credentials which will subsequently reduce the appeal of the properties which need to be upgraded to hit certain goals. There will be more importance placed on compliance and data analysis to assess the efficiency of buildings and monitor their emissions. The outcome of this move to sustainable properties will likely be an increase in prime rental costs. Properties which offer green spaces and other sustainable initiatives such as rainwater collection will be the ones that achieve top rent in London.