Business occupancy costs down but mainly due to greater office space efficiency

Apparently redundancies and greater space efficiencies have driven office costs down across the UK, but London's West End has proved to be the exception. The cost of providing office space for UK companies' staff fell during 2011 according to an occupancy cost survey by DTZ. In contrast they say that costs in the City of London were edged down 7.3%. Occupancy costs per workstation include rent, maintenance costs and property taxes. By looking at costs per workstation, the effects on statistical analysis of the different ways in which businesses use space have been reduced.

There were large regional variances, so in Birmingham, for example, costs were down some 11.5% and in Edinburgh costs were down 4.2% year-on-year. At the other end of the scale, London's West End is the most expensive business district in Europe, second only to Hong Kong. In the UK both Glasgow and Manchester saw increases in costs.

It is thought that where costs have fallen this has been largely due to greater efficiencies in the use of space. There has been a lot of corporate consolidation of space use going on generally with greater use of open plan offices, fewer meeting rooms etc. Karine Woodford, Head of Occupier Research at DTZ, said: "After a year of relative respite, cost-cutting has returned in a big way with occupiers awaiting developments in the eurozone and looking to reduce space per employee. Consolidation has been a theme across the country particularly within the banking and insurance sectors. They are increasingly seeking occupational densities of one person per eight square metres, down from 10 square metres seen previously."

Cost forecasts to 2016 are for positive growth across most markets in the USA, Asia Pacific and Europe.

So far as the serviced office market is concerned, it is the operators of serviced offices in London, for example, that will take responsibility to keeping overall costs down - leaving their tenants to focus on their core business without having to worry about issues such as property maintenance.