In the City, serviced office space has quadrupled over the last two decades and the existing market is set to double by 2025. The sector is booming — and here are 8 reasons why…
1. Serviced offices offer an accessible ‘way in’ to the capital
When the City of London Corporation commissioned research on agile occupiers two years ago, it found that 60% of existing serviced offices in the City had arrived there post-2008. The fact that this corresponds with the onset of the last economic downturn is no accident. In an uncertain climate, it’s only natural that businesses hunt out smarter, more affordable and less risky ways to establish or maintain a London presence.
Fast forward to 2016, and although the credit crunch no longer features in the headlines, many smaller businesses still find themselves on the sharp end of tight credit conditions and lending criteria. The serviced model offers a useful way around this: the ability to set up a London base — without the uphill struggle of funding a huge capital outlay.
2. Helping businesses to scale up smoothly
It’s not just startups that are driving the booming serviced office sector, and the Corporation of London recently highlighted how this model is helping established companies meet their ‘periphery’ real estate needs. For office-based businesses, property expenses tend to be second only to wage bills in their list of high cost financial commitments. Matching capacity with day-to-day demand can be tough.
For settled companies who need extra capacity, going down the route of acquisition or negotiating a lease for more floorspace in their current location can be a drawn-out process. What’s more it’s hardly a the best option if the need is only temporary. Serviced offices, by contrast, offer “space on demand”: the ability to move in quickly to solve an immediate overflow problem — without a long-term commitment.
3. Flexible arrangements provide something for everyone
With serviced offices, the occupancy agreement takes the form of a licence rather than a lease, offering flexibility and greater freedom to come and go.
London providers are helping to stimulate demand and cater for various business profiles with a range of licence types. Where a company’s needs are difficult to predict, a rolling renewable monthly licence could be the best way forward. Alternatively, a 12-month licence could be preferable where business requirements are more certain.
This flexibility can even extend to securing a much longer agreement or up to three years. An independent commercial advisor can help you negotiate a number of contracts over the desired time period. You still have the option to break at each 12 month point, yet have the security of knowing your projected rental spend for that length of time.
4. Responding to and complementing new ways of working
Businesses are increasingly focusing on office layout to boost productivity and promote collaborative working. Serviced office providers in London have been quick to respond to this with state-of-the-art facilities, open-plan spaces, break-out zones, meeting rooms, reliable connectivity — and everything else businesses need to work smarter.
5. The ability to have your office, your way
London providers are attracting a wide variety of clients with a menu of solutions and add-ons. Secretarial services, print and copy, videoconferencing suites, on-demand or occasional use meeting rooms, kitchen and/or on-site cafe, gyms and shower rooms: businesses can mix and match to get precisely what they need.
Individual office layouts can also be configured to suit business needs, such as adding executive offices, meeting rooms, breakout areas etc. It’s all flexible,
6. Iconic locations are becoming a possibility
A physical presence in a famous location and/or a W1 or EC1 postcode can go a long way in convincing prospects that you are the real deal. It can also help to attract top talent.
Deloitte highlighted how, as a side-effect of the banking crisis, prime Docklands locations have now been given over to attractive serviced office space. Meanwhile, high-profile developments such as The Shard and The Leadenhall Building are taking on serviced office tenants. This trend is expected to continue over the next couple of years as the next wave of skyscrapers opens their doors.
7. Join ‘The Hub’
For networking, for sharing ideas and for sheer kudos, businesses are realising that where you are can be just as important as who you are. The ‘tech hub’ that has grown up around Aldgate is a prime example; with many newcomers moving into the area via the serviced office route.
It’s not just tech companies who want to be at the centre of things. For financials, professional services, third sector and many more besides: the draw of being in close proximity to like minded people and thought leaders remains as compelling as ever.
8. Crossrail is coming
For many of the 750,000 workers who already commute into London, getting to work will soon become easier and quicker, thanks to Crossrail. As the capital’s infrastructure is brought up to date, businesses are presented with yet another reason to get their London office up and running.
Are you ready to take a closer look at what London has to offer? Search for serviced office space and let DeVono help you find your perfect place in the capital.