The post-Brexit picture looks set to be unclear for the foreseeable future. For businesses with important property-related decisions, such as lease expiries or breaks on the horizon, this creates a potential dilemma: how do you balance accommodating your workforce, while avoiding an overly risky commitment? Here, we look at potential ways to deal with this dilemma…
UK businesses are currently attempting to work out the possible implications of Brexit. These are uncertain times; in other words, this is precisely the type of climate where big business decisions are put on hold until there is a clearer picture of what the future holds.
This approach might work for certain types of business decisions (whether or not to start promoting your services in Europe or to open your Frankfurt branch office, for instance). But in other areas, it has to be a case of ‘business as usual’; if your lease is about to expire, you still have to act, no matter what’s going on around you.
So, many decision-makers are currently being faced with a practical crash-course in ‘change management’. If you’re currently reviewing your post-referendum business strategy, one of the first things you should do is to split the decisions you need to make into two categories: those that can be put on hold – and those that need an answer – but need to be considered in a different light in the context of the Brexit decision.
“Should we renew our lease?” and “What level of office accommodation should we commit to?” are likely to be two questions that fall into this latter category.
Let’s say your growth forecast suggested that you would require a 20% increase in office accommodation in 2017. You remain hopeful that your estimates will stay on track, but you necessarily have to take a more cautious view at this time.
One way to address this could be to make a distinction between your core accommodation requirements and your projected or peripheral requirements; i.e. the requirements that should arise – but only if you grow as planned.
In practical terms, this could mean entering a lease arrangement to house your current staff. Then, if the need for extra accommodation does crop up later, you could address this through serviced office arrangements.
Your lease is about to expire. You are also extremely reluctant to take on a new commitment in the current climate. A serviced office arrangement offers a way of ensuring continuity – but without that commitment. Look closely at the possibility of month-by-month contracts to achieve this.
You may require extra capacity – but are reluctant about having your staff spread over multiple locations.
If this is the case, look closely at the possibility of a lease in a location that features a combination of leased and serviced spaces. Here, you get the flexibility of ‘bolting on’ additional capacity to meet short-term needs as and when required – such as project work, for instance.
During the time of the last recession, the UK serviced office market grew by 19%. This flexibility; the ability to scale up and scale down according to a changing climate and fluctuating business needs was key to this boost in popularity.
But here’s the really interesting thing: when the recession ended, serviced space continued to grow in popularity. Businesses realised that this way of operating could offer much more than merely a temporary stop-gap to ride out troubled times.
The certainty and convenience of an all-inclusive monthly payment, the type of facilities that help to inspire top talent and impress clients, the opportunity to be housed in an iconic location: all of this means that companies are increasingly turning to serviced offices – whatever the economic ‘weather’.
Post-Brexit, serviced offices are likely to get a further boost in popularity. Cautious prospective occupiers offer rich pickings for landlords, so it’s more important than ever that businesses seek independent, full and frank guidance.
To talk through your needs with an independent agency that only acts for occupiers, speak to DeVono today.