Cities across the UK are experiencing a shortage in supply of office space which threatens to drive up costs for businesses as rents inevitably increase. The shortage in office space has led to a surge in demand for office refurbishment in efforts to increase supply in some of the UK cities including London Cardiff and Bristol.

The statistics were revealed in Savills’ Regional Office Market Review & Outlook report which also says that there is less than one year’s supply of grade ‘A’ space available. The national shortage is driving up demand at a time when space in crowded city centres has become limited as many older buildings have been converted into residential housing.

In London, there is now a particular problem as commercial and residential developers fight it out for space in the city. This has pushed up office rents in locations such as Canary Wharf.

Bristol and Cardiff were two cities highlighted as having the biggest potential for rent rises this year. Bristol office rents are set to increase by 12% while nearby Cardiff is expecting to see rents rise 9%.

Across the UK availability of office space is down 18 percent on 2007 levels.