NB Real Estate, a London-based commercial property agent, has published research revealing that approximately a third of the capital’s office lettings in the final quarter of 2009 were taken up by insurance companies.
The research revealed that in the City of London a minimum of 30% of new office space uptake, 250,000 of the 860,000 square feet let in the fourth quarter of 2009, was taken by the sector. The insurance industry is taking advantage of low rents following two years of recession which has seen many companies downsizing their office space, new office builds put on hold and a reduction of letting prices.
In addition to companies new to the area entering the market, the uptake has also seen existing companies expand and upgrade their office space, as the sector has fared better than most in these slow economic times.
Research has also suggested that the affordability of office space has enabled companies to move into more-high-tech locations, adopting more modern, state of the art working practices.
Examples of recent major deals include Catlin moving into 115,000 square feet of office space at 20 Gracechurch Street; and R K Harrison Insurance Brokers leasing 44,057 square feet at 1-7 Whittington Avenue.
James Gillett, director of NB Real Estate City of London Agency said: “Where business uncertainty pushed property relocation down the board agenda for many financial services firms, the insurance sector has taken a very different approach. Many have seen the opportunity to upgrade counter-cyclically. Whilst other financial services organisations are only just beginning to look at new space, insurers, reinsurers, insurance brokers and actuaries are actually completing deals.”
Gillett concludes: “There has been a revolution in the way that the services sector occupies space over the past decade. Businesses are now much savvier on the importance of a quality working environment for recruiting, retaining and motivating staff.”