All insight

Forward insight / Central London offices

The true cost of a Central London office.

Two offices with similar quoted rents can have materially different costs. A useful comparison must look beyond the headline figure and translate every relevant item into one clear occupational cost.

Start with the complete picture

Rent, business rates and service charge form the recurring base. Rent-free periods, landlord contributions and stepped rents then change the effective cost over the term.

Fit-out, furniture, professional fees, deposits, guarantees and eventual dilapidations can be just as important. They must be included when fitted, Cat A and managed offices are being compared.

  • Headline rent
  • Rates and service charge
  • Incentives and capital cost
  • Exit liabilities

Compare like with like

A fully fitted office may carry a higher rent but require far less capital and management time. A lower-rent Cat A floor may look attractive until the fit-out budget and programme are included.

Managed space can provide speed and flexibility, but its bundled price should be tested against a conventional lease over the same period. Flexibility has value, but it should still be priced clearly.

Make the decision usable

The most useful output is a monthly all-in figure and a net effective rent, supported by clear assumptions. Decision-makers can then see the real difference between options rather than comparing incompatible headline numbers.

The comparison should also show when cash is required. A lower long-term cost may still create a heavier initial capital requirement, which can change the right answer for the business.