Reasons for Relocation
Across the UK as a whole, the gap in rents between the capital and the rest of the regions has been
dramatically reduced due to the collapse in the London commercial property market. There has
been as much as a 50% drop in prime rents for Central London since the boom times of the late
1980's. However, prime rents in Central London are now starting to rise again and rental indexes
are starting rise for the first time in years.
High rents in Central London were a main factor in relocation in the late 1980's. Other factors are
now key in the relocation equation. Overall, the important of rents alone as a factor is decreasing.
Other factors such as salary levels are becoming increasingly important in dictating company
relocations. Indeed many companies who consider whether or not to move may find that it is
cheaper not to. However, when the savings on salaries are taken into account, a move does look a
possible option.
Traditionally, salaries have been higher in London than in any other part of the country. As such,
the salary factor could be a good reason for companies not to locate or relocate in London.
However, the fact that London has been voted for the fifth year running the best city in Europe in
which to locate a business, by a survey of senior executives of 500 European companies, is one
factor that could make a case for paying higher salaries to be situated in London.
An ability to recruit quality staff is also a key factor in relocation. Areas with a lot to offer in this
department will benefit greatly in attracting relocations. This is also a factor which has a great deal
of bearing in deciding how far afield a move or consolidation is made. The attraction of short
distance moves lies in the ability to retain more staff.
Other staff-related factors include a good supply of local housing, good local amenities and quality
of life in the area.
Grants, financial incentives and other types of regional incentives are important. Being
geographically closer to clients, customers, suppliers and partners can also be reasons for
relocation. Logistical issues can also be key. Expansions are generally dictated by niche
opportunities within particular areas.
On a final note, the reasons for relocation can be many and very varied and each individual factor
must be fully weighed up to assess its particular merits or otherwise.
INFLUENCES ON COMPANIES LOOKING FOR NEW PREMISES (Source: Struff & Partner)
Location 97%
Cost (rent & rates) 94%
Parking 90%
Building Specification 83%
Staff availability 78%
Amenities 77%
Airport 65%
Port 30%
Creche 23%
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Information Source: Insight Information Services Database
Programmers: First Computing Solutions