Why smart landlords are focused on commercial property connectivity
The importance of connectivity to business is redrawing the commercial property market landscape in London. Mark Castle explains why smart landlords are planning ahead.
Recent figures from BNP Paribas shows that while central London offices rents remained at the same level, average vacancy rates increased to 5.7%. Within Docklands vacancy rates rose to 9.28% which is well above the ten year average of 7.51%.
One of the main reasons why rent values are static and vacancy rates rising is lack of connectivity. Fast, reliable connectivity is the lifeblood of business now, yet the process for connecting an office is often complicated and time-consuming, taking as long as eight weeks. For this reason, many businesses are opting for the serviced office option.
London currently ranks 30 out of 63 UK cities for the number of premises covered by ultrafast broadband
This is why smart landlords are targeting connectivity to win back tenants.
This competitive London property market means it is important for landlords to think of their tenants as customers. While traditionally it was the tenant's responsibility to find a suitable connectivity offering, landlords are now realising how important it is to make sure their buildings are well connected.
Cluttons research helps explain the growing importance of connectivity to landlords:
• Good connectivity in commercial London properties is worth up to an additional £4.17 per square foot
• 57 % of C-Suite level respondents stated that they would be prepared to pay more for better connectivity
• Employees and decision-makers rank connectivity as the fourth most essential consideration after location, rental cost and transport links.
It is these market forces that have already driven 49% of landlords to focus on improving connectivity in their buildings, and of these, 72% say it is as a direct result of tenant demand.
These findings are not particularly surprising given that London currently ranks 30 out of 63 UK cities for the number of premises covered by ultrafast broadband and is positioned in the bottom five UK cities for 4G coverage.
Fusion Voice and Data is working with many of London’s portfolio managers, landlords and agents to provide information on the costs, availability and lead times for different types of connectivity available for their individual buildings. We even have solutions which enable us to pre-connect buildings meaning new tenants can get fast, reliable and cost-effective connections in a matter of days giving a powerful competitive advantage over other available properties.
Find out more about our landlord connectivity services.