International real estate advisor Savills analysed every Grade A relocation over 20,000 sq ft (1,858m2) since 2010 in the Greater London and the South East region and found that most companies are currently more focused on finding better quality accommodation and retaining staff, rather than cutting costs. The companies are choosing to stay in the same area instead of moving elsewhere to find lower rents.
Corporate occupiers in Greater London and the South East move an average of just 6.9 miles when they relocate, but the most common distance is just 0.5 miles (804 metres).
Savills believes this could soon change as property costs continue to rise and occupiers begin to review their real estate strategies to consider either wholesale moves or splitting front and back office functions between London and out-of-London locations.
Jon Gardiner, head of South East office agency at Savills, comments:
“As our analysis shows, moves over a shorter distance have been most common over the last five years with occupiers in Greater London and the South East, who are much more likely to move within the same area than risk losing staff for the sake of reducing their overheads by moving to a more cost-effective location. However, we think that this is likely to change with businesses considering longer distance moves in the face of growing property costs. This is particularly relevant for those companies looking to relocate out of Central London, where property costs are significantly higher.“
While there is minimal variation between how far both large and small occupiers are prepared to relocate, there appears to be a difference between industry sectors.
Simon Preece, commercial research analyst at Savills, adds: “In 2015 manufacturing businesses moved on average 10.9 miles — significantly further than all other sectors. This is due to recent rapid expansion in the pharmaceuticals sector: with highly skilled, specialist workforces, which tend to be prepared to commute further to their place of work, companies in this industry can look further afield to find space that fits all their requirements without fear of multiple staff losses.”
Source: Savills: Relocation, relocation? Most companies in Greater London and the South East move just 800 metres