14 Office Predictions for 2014
What will 2014 hold for the serviced office industry? What are the key trends to look out for? We asked fourteen experts to share their predictions.
Jennifer Brooke, Executive Director, the BCA:
ΓÇ£Speaking to numerous flexible workspace operators up and down the country, it is evident that the sector has continued its forward-moving trend this year and 2014 is looking particularly positive.
ΓÇ£There is an encouraging level of optimism and operators are constantly speaking in positive terms of growth, expansion and demand. Another term we are hearing more of is “loyalty”. Businesses of all sizes are choosing to stay within the confines of flexible workspace for longer, rather than moving on to long-term conventional leases. In particular, clients value the flexibility, easy-in easy-out commitment, simplicity and quality service associated with flexible workspace.
ΓÇ£Serviced offices continue to appeal to SMEs and, based on current trends, we can expect to see more corporates turning to our industry next year. We also anticipate more growth in sub-sectors such as flexible storage.
ΓÇ£All the signs suggest that the flexible workspace sector will continue to grow and diversify in 2014. We should also expect more industry consolidation and niche market entrants, which will only serve to strengthen our sector.ΓÇ¥
Sallie Maskrey, Managing Director, Portal Business Centres:
ΓÇ£2013 has seen growing confidence with our clients, and I believe this will continue in 2014 with more internal growth and continued demand from new start-ups. We expect to see good occupancy rates coupled with a small uplift in rents.
ΓÇ£Locally, Warrington has an exciting year ahead with two of the North WestΓÇÖs major developments getting underway at Omega to the north, and the Stadium Quarter near the town centre, both of which will have a positive impact on Dallam Court and the town as a whole.
ΓÇ£Looking ahead to 2014, I see the trend moving towards more flexible and collaborative workspaces. The demand for this will increase and operators need to be able to adapt with the market and provide more communal space fit for purpose.ΓÇ¥
Stephen Finnegan, Managing Director, Targetspace:
ΓÇ£Based on the trends weΓÇÖve seen at Targetspace in 2013, I believe 2014 will continue to be an occupiersΓÇÖ market with plenty of choice, creating an extremely competitive environment for operators to work in. Top quality service, therefore, has never been more important.┬á A focus on tried and tested comms and IT systems that have a proven track record is a must for new occupiers, which for operators means ensuring continued investment in technology support along with refurbishment of infrastructure and facilities to stay fresh.ΓÇ¥
Chris Meredith, CEO, officebroker.com:
ΓÇ£I think that London will continue to grow and go from strength to strength with a number of providers opening in buildings in areas where we have had a lack of supply for a long time. Areas such as Waterloo and Shoreditch fall into this category. We have seen strong demand for these areas and the buildings we do have within them have been full for a long time, making these new offices a welcome addition to our portfolio.
ΓÇ£The rest of the UK showed signs of recovery and I feel will continue to do so during 2014. Key cities such as Birmingham and Manchester seem to be getting a lot of interest towards the end of 2013 with major developments such as New Street Station in Birmingham and then HS2 further down the line. I think it has caused certain businesses to re-evaluate where they are located in the UK.
ΓÇ£The recession brought positive attention to some of the key benefits of serviced offices to major organisations across the UK and it would seem that these organisations have identified that these benefits still remain now the country is coming out of recession. This, combined with the increased interest from international companies, is seeing the serviced office market go from strength to strength.ΓÇ¥
Michael Guest, Managing Director, essensys (Winners: BCA Trade Supplier of the Year 2013):
ΓÇ£In my opinion, the buoyancy of the market that we witnessed in 2013 will continue through 2014 with organic regional growth, concentrated growth in London and I suspect we may see some of our UK operating partners enter different markets and even new territories. Merger and acquisition activity was once again significant this year and I expect consolidation to continue, as growth capital becomes more readily available for the active operators.
ΓÇ£Technology innovation will also play a significant part in 2014 with the ever continual demand for bandwidth consumption and the ΓÇ£rise of social businessΓÇ¥; bringing together mobile working technologies, the increased consumption of cloud based IT services and the wider use of unified communications tools. Technology, workspace, co-working and traditional serviced space will challenge each other interestingly in 2014.ΓÇ¥
Corrinne Gardiner, Business Development Director, 23 Melville Street:
ΓÇ£Emphasis on faster, more reliable broadband means that businesses may make serviced office rental based on the speed of internet services ΓÇô something which weΓÇÖre certainly being proactive about.
ΓÇ£WeΓÇÖve seen a rise in global activity among our clients ΓÇô with many of them growing to trade in the likes of South Africa, Europe and beyond ΓÇô who need a secure and fast internet connection.
ΓÇ£Business centres will need to have their fingers on the pulse to make sure they are constantly improving their broadband service to make sure it meets the needs of growing global and exporting companies.ΓÇ¥
Chris Jenkins, Design Director, Peldon Rose:
ΓÇ£With the increase of flexible working and telecommuting our offices will seem like quieter places. Statistics suggest that working from home, to the hours that suit each individual, increases productivity, engagement and wellbeing.
ΓÇ£As Bring Your Own Device continues to gain in popularity many employees will start to use their own devices at work, predominantly this will be their own mobile devices, such as tablets and smart phones.
ΓÇ£The Cloud continues to gain strength and become the norm when purchasing new software. Advantages such as automatic upgrades, access from anywhere and collaboration are a rising trend for 2014.ΓÇ¥
Rav Jisdhaul, Sales Manager – UK & EMEA, officebroker.com:
ΓÇ£Our industry has matured significantly in the last few years, with clients more aware than ever of the benefits that serviced office space can deliver to them and their business. As clients become increasingly astute about serviced offices, I believe it will be service quality that will become the dominant factor in where clients choose to locate their business.ΓÇ¥
Richard Gill, Managing Director, Landmark Plc (Winners: BCA Business Centre of the Year 2013):
ΓÇ£2013 was patchy and unpredictable in terms of the volume and quality of enquiries coming through for the City and West End. I expect to see a gradual stabilisation of this in 2014 as confidence in the recovery of the economy grows.
ΓÇ£I think the industry will perform well next year and that occupancy levels across the board will improve along with workstation rates. I understand that there are some significant voids coming up in the City early in the New Year but I am sure these will be taken up quickly and then we will start to see an increase in workstation rates ΓÇô clients are undoubtedly prepared to pay a premium for high quality space provided it is matched with high quality service. I hope we will see a greater emphasis on this aspect from conventional landlords and business centre operators alike.ΓÇ¥
David Saul, Managing Director, Business Environment (Winners: BCA Outstanding Leadership Award 2013):
ΓÇ£There will be strong demand in Central London, predominantly in the West End, Midtown and then the City, mainly due to London being a micro-economy of the UK. Regional centres will struggle but should do better than the year just gone. We can also expect further consolidation in our industry.ΓÇ¥
Alastair Maloney, Account Manager, officebroker.com:
ΓÇ£2014 should be an interesting time for the UKΓÇÖs regional cities. In particular, Birmingham and Leeds are both going to see a benefit from the HS2 link and there is likely to be an increased need for serviced office space for projects relating to the new transport link.
ΓÇ£Manchester is also a key area to watch, from a more creative perspective. WeΓÇÖve certainly seen an increase in IT and design based companies looking for space here. Alongside this weΓÇÖve seen an increased demand for the more Google-inspired type of space, showing companies are willing to invest in the area. Serviced buildings have reacted to the demand, with Orega opening King Street this year, increasing the supply of more ΓÇ£funkyΓÇ¥ space within the city.ΓÇ¥
Natasha Turner, Area Manager, Clarendon:
ΓÇ£Despite a strong growth in occupancy levels in 2013, Clarendon believe the market for Serviced Offices is set to improve in 2014.
ΓÇ£We believe that businesses will continue to develop with the extension of the small business rate reliefs and the growth in the UK economy, young businesses will feel it a good time to expand into office space.
ΓÇ£As a result of this continuing growth, we also believe we will see an increasing emphasis on quality-led office requirements, emphasising the value which we as business centres can provide.ΓÇ¥
Liz Yorke, Operations Director, officebroker.com:
ΓÇ£The market has been and continues to be competitive; making the strategic partnerships you build within the industry increasingly important to ensure a return on investment. As the market continues to grow in the year ahead, I believe insuring your partners represent your product correctly, engage with your team pro-actively and above all add value to your business will be the key to a successful 2014.ΓÇ¥
Frank Cottle, Chairman, Founder, Alliance Business Centers:
ΓÇ£2014 will be a year of ΓÇÿgrowth through disruptionΓÇÖ within our industry; with the emergence of a new, global business centre operating group of enormous capabilities and a well-recognized brand.┬á In addition, it will be a year of increased ΓÇÿvariety and choiceΓÇÖ in terms of officing and service offerings from the industry; with more coworking in various new formats, more meeting room companies offering business centre-like services, and more technology companies vying for the wallet-share of the mobile worker.
ΓÇ£2014 will also be a year of cannibalism, as offerings and services outstrip the actual growth of the existing client baseΓÇª so, back to disruption; expect to see a fair number of newly established coworking and business centre operating companies either change their operating format, get swallowed up by stronger operators, or disappear entirely.
ΓÇ£If these things sound negative, they are not!┬á This is how our industry has grown in every major business cycle for the past 40 yearsΓÇªand I have the grey hair and wrinkles to have seen it.┬á SoΓÇª simply decide what your position will be; are you a ΓÇÿdisrupterΓÇÖ, or, are you a ΓÇÿtargetΓÇÖ?
ΓÇ£Have fun, 2014 promises to be one heck of a wild ride.ΓÇ¥
Thank you to all our contributors for taking part and sharing your predictions. Not featured above? WeΓÇÖd love to hear from you. Why not share your office predictions in the comments below.