been a 20% drop in sales activity over the past year, the rental market is running very hot. “People are returning to the
city after Covid, which has fed into strong rental demand, but there is also a shortage in supply,” he says. “Private landlords are exiting the market for various reasons, primarily around legislation, which is impacting their ability to make the exercise profitable.” During the pandemic there
was a three-year gap where new- build volumes slumped, work on construction sites stopped, and there was a significant disruption in supply chain. “Our data suggests that London
Relocation, says companies are looking for cost efficiencies and most major markets around the world have a mismatch between supply and demand. “We are still seeing relocations at
the top level of business,” he says. “They are often board level, senior executives, or staff who are critical to business function.”
WHAT DOES THE FUTURE HOLD FOR OFFICE SPACE IN MAJOR CITIES? Another key trend is the streamlining of offices in key locations as companies decide how they are going to use prime office space in the future. “Most employers probably will
be reducing the amount of office space that they occupied by about 20%, but that process takes time to unravel because of long-term leases,” says Liam Bailey, global head of Knight Frank’s research department.
“Businesses are focusing on
better-quality space and using offices for advertising, marketing, networking and training, rather than just a workplace,” he says. The residential sales market in
London has slowed down due to interest rates and the increasing cost of mortgages. Yet while there has
rents overall are up 30% in the last two years, with rent rises in central London, up by 45%,” he says. “This comes after rents fell by about 15% to 20% in 2020.” Most developed markets have
experienced a similar picture to the UK, given the rapid rise in interest rates in the US, the EU, Australia and New Zealand. “In our recent survey on global
rental markets we saw rents rising globally at around three times pre-pandemic rates,” he says. “This is due to a lack of new-build stock, strong demand and people returning to cities driving up rental prices and is a consistent picture across Singapore, New York, London and other big cities.” Jonathan Beech is managing
director, Migrate UK, a law firm specialising solely in immigration law for businesses experiencing skills shortages in tech, finance and engineering. He says there is still strong
activity in relocation in the tech and healthcare markets, but that most assignments are still sponsor-led because of the complexity around working visas in the UK. “There hasn’t been any clear kind
of long-term plan to fill the current skill shortages,” he says. “Tech is the biggest industry we are dealing with at present, with experts coming into the UK from India. There is also the emergence of Sub-Saharan Africa,
which is providing a lot of experts in healthcare.” The current
situation,
therefore, is challenging for mobility managers who are trying to balance budgets and employee expectations, while negotiating a path through a fast-moving rental market around the globe. “In the midst of an assignee
housing shortage worldwide, mobility managers and HR leaders must support employees along their relocation journey,” says Vicky Woods of Crown Global Mobility. “From managing assignee
expectations and making them aware that they may have to make sacrifices when it comes to their requirements, to setting out reasonable budgets, there are ways for mobility managers and HR leaders to ease the strain. Ultimately, with the right approach and a degree of flexibility, challenges within the housing market can be overcome.”
“ IN THE MIDST OF AN ASSIGNEE HOUSING SHORTAGE WORLDWIDE, MOBILITY MANAGERS AND HR LEADERS MUST SUPPORT EMPLOYEES ALONG THEIR RELOCATION JOURNEY.”
VICKY WOODS, CROWN GLOBAL MOBILITY
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GLOBAL MOBILITY
GLOBAL MOBILITY PROPERTY
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