It’s most expensive to accommodate an employee in London than it is in Sydney, Los Angeles and Chicago. In Savills latest Live/Work Index, if you measure the combined cost of residential and office rental costs per person per year in the world’s leading cities it is London that comes out on top.
The figures all go towards painting a picture of both the productivity of a city and their value to global business. The average total cost of accommodation per worker, per year in the 20 cities Savills measured for their Index is US$56,855. It’s US$16,500 in Rio, while US$112,800 in London. London and New York are the two most expensive cities.
It’s not the first time London has topped the chart; in fact it has come out on top for the past three years. Savills says that, in fact, London does offer a fair price because the demand is so high in the capital. Yet it also voices a word of caution, flagging that when rents become unaffordable, when a global city fails to grow and expand to meet the demand it can become difficult for it to attract new people. There are many different factors that make a city attractive; social elements as well as economic strength and security, environmental balance but when a city stops becoming affordable it may be reducing these livability factors. It could be wildly succeeding in one corner but failing on other accounts that negatively impact on the people living in it.
The productivity and global appeal of London is what makes it so strong. The corporate companies, the wealth of technology companies, the financial bases in the capital; each of these has a global pull, attracts global expertise and thus increases demand. Corporate business travel becomes part and parcel of this culture with corporates looking for extended stay accommodation in London, be it for a fixed period or for when they are relocating to the city.
Serviced apartments provide both an affordability and a flexibility for those business travellers. Whether looking to stay in the capital for a week or a year, or anything in between, serviced apartments are priced much more competitively than flats in the privately rented market. They are centrally located with modern amenities and security features that flats might not afford. There’s more space than a hotel, less cash needed than in a private flat. For someone moving to a new city, whether for a fixed period or for relocation, location and a vast supply of funds to pay rent are two things they would probably rather not think about; a serviced apartment provides peace of mind and enables them to focus on the day job.
The global demand of London is one of the things that makes it so attractive. Inevitably, this demand is what pushes up both residential and office rental prices. Affordability will continue to be a challenge for London but what is important is choice. For corporate and business travellers, the flexibility afforded by serviced apartments enables them to both live and work in a vibrant global city without having to worry about the cost of accommodation.