Commercial property use in London’s outer boroughs sees a substantial increase, exceeding pre-pandemic levels, according to data from commercial real estate firm, EG.
The first quarter of 2023 saw a drop of only 7% in overall inquiries in outer London, compared to a more substantial 17% in inner London. However, experts warn that changes in transportation policies, including the expansion of ULEZ and bus service cuts, could jeopardise this trend.
EG’s in-depth analysis of planning applications and change of use data shows that the outer areas of London, as compared to zones 1 and 2, are demonstrating robust growth amidst economic uncertainties.
More occupiers are seeing the benefits of moving to outer boroughs, as evidenced by a significant rise in change of use applications over a four-year period, covering one year before the pandemic.
The data reveals several noteworthy trends. There is a sustained rate of change in Newham, Waltham Forest, and Hillingdon, in stark contrast to Hammersmith, Islington, and Lambeth. Barking and Dagenham leads all boroughs in terms of change of use planning applications, with a 9.26% share, closely followed by Hillingdon with 5.56%.
For retail deals in Q1 23, Newham ranks fourth and Bexley second for industrial deals. Bromley has witnessed an impressive 105.26% increase in inquiries year on year from Q1 2022, while Brent leads with a 20.53% share of deals in Q1 23. Barnet has seen the third-largest increase in demand, with an overall 96% rise in inquiries, being the only borough to report growth in all three sectors.
Jonny Tomlinson, head of researched data at EG, said: “Business and commercial property owners are motivated by their bottom line and our data shows that the path to boosting it lies in outer London boroughs.
“Against a backdrop of contentious transport policy changes, including the expansion of ULEZ, and cuts to buses alongside post-pandemic hybrid working, the trajectory and strength of this pattern looks set to be tested.
“The benefits will be widely felt. The outer boroughs expanding into thriving business hubs means growth in business rates, footfall, and all adds up to only benefits to the local economy.
“Our data suggests potential for an imminent redrawing of London economics. Any savvy expanding business will be drawn to the opportunity this shift is presenting but examining those decisions with a ULEZ shaped magnifying glass.”
