Investment in digital connectivity and smart technology is leading to significant rental premiums in commercial office buildings across London, according to a deep dive into the data by Cushman & Wakefield.
The "Smart Premium" report finds that offices with advanced digital infrastructure command an average rental premium of 4.1% subject to other market and building characteristics. Buildings with the highest levels of digital capability have achieved uplifts of up to 5.1%, underscoring the value of integrated smart systems and resilient connectivity, Cushman reports.
Daryl Perry, head of UK research and insight at Cushman & Wakefield, said: “As occupier expectations continue to evolve, landlords and developers must ensure their buildings are digitally resilient, intelligently designed and equipped to meet the demands of tomorrow’s workplace. Our research shows that future-proofing office assets with robust digital foundations is not only best practice but also delivers tangible returns through higher rental premiums.”
The report explores the wide range of factors influencing rental premiums in the central London office market, before focusing on the specific impact of digital infrastructure and smart technology. Drawing on a decade of leasing data and certification records from WiredScore, the analysis quantifies the financial benefits of technology-enabled workplaces.
These findings are presented alongside detailed insights from Cushman & Wakefield into the drivers of rental premiums including the occupier perspective and the influence of individual building features on pricing.
Cushman & Wakefield advises landlords and developers to integrate technology budgets early in the design process. It says allocating between 50p and £1.20 per square foot at RIBA Stage 1 can help avoid costly retrofits and ensure buildings meet the digital expectations of modern occupiers.
Case studies featured in the report, including 40 Leadenhall and 25 Baker Street in London, demonstrate how high levels of digital infrastructure has helped secure prelets and build tenant confidence. The adviser said these examples highlight the importance of delivering buildings that go beyond aesthetics to offer genuine technological capability.