London SMEs
The demand for premises of London's SMEs
Roger Tym & Partners conducted this 2007 study to inform the London Development Agency's (LDA) new SME premises strategy, which will guide their intervention in this sector of the property market.
Intervention should only occur where there is demonstrable market failure. To establish whether the market is failing to supply space for SMEs in London, we looked at whether the available supply of premises is meeting small firms' aspirations, and the factors that may be restricting supply. We concluded that there are three main areas where the LDA can justify intervention:
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provision for specialist SMEs
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to support start-ups in deprived areas
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to prevent higher value uses excluding employment activities.
Our study took the form of an interview survey of nearly 2000 enterprises and an in-depth analysis of the property market.
In overview, the results of the survey tell us that London SMEs are subject to relatively high costs for property that is often sub-standard and can be difficult to find. The most significant challenges are parking, crime, size and age of premises, and poorly maintained public realm. However, the advantages of London locations outweigh the sacrifices needed.
Whilst competition is high, there is no evidence of general market failure in the supply of space for SMEs in London. However, the market may fail in particular areas, especially for new and young firms. In addition, competition from higher value uses (mainly residential) is pushing out SMEs.
Further information
