London Serviced Office Space: Industry Figures See ΓÇ£Sustained RecoveryΓÇ¥ in Q3 Report.
Encouraging signs for the Central London serviced office market today, with a report from the industryΓÇÖs largest independent broker revealing an upturn in workstation price, growing workspace requirements and a healthy stream of new enquiries ΓÇô generating positive comments and bringing an optimistic outlook from leading figures in the flexible workspace market within the Capital.
Tracking activity in the serviced offices market, the Serviced Office Review: Central London Q3 2010 from officebroker.com provides an insight into this vibrant business environment which caters to both mainstream corporate clients as well as being rich in the SMEs heralded as vital for the future of the British economy.
Having recorded an average workstation price of ┬ú509.00 in Q3 2009, a decrease of ┬ú149.00 (22%) on the average price of ┬ú658.00 recorded in Q3 2008, the officebroker.com report from reveals signs of a price recovery in Q3 2010 ΓÇô with the average price of ┬ú569.00 per workstation being reported representing a ┬ú60.00 per workstation (11%) rise on the price of ┬ú509.00 recorded in the same three month period twelve months earlier.
ΓÇ£The report highlights that London is leading the way in price recoveryΓÇ¥ explained Julie Grieve, Managing Director of Abbey Business Centres, who operates two grade ΓÇÿAΓÇÖ business centres in the City of London including one in 30 St Mary Axe – the iconic ΓÇ£GherkinΓÇ¥.
ΓÇ£Clearly the last 20 months have been difficult in the market, as they have been throughout the worldΓÇ¥ continued Julie, ΓÇ£However it is my belief that the regional markets were some way behind London in entering recession ΓÇô in particular Scotland ΓÇô and so itΓÇÖs likely their recovery will take longer.ΓÇ¥
ΓÇ£But these figures are now showing a sustained period of recovery in London and I am therefore optimistic that we will see recovery in these regional markets during the early part of 2011ΓÇ¥
Expectations that the encouraging activity being reported in Central London will begin to filter out to the regional markets is shared by Jim Venables, Managing Director and co-founder of officebroker.com.
ΓÇ£Central London stands alone from the rest of the UKΓÇ¥ states Jim, ΓÇ£With the Central London market showing signs of improvement it sets a positive vibe for the regional markets. Given that we saw the Central London market begin to stabilise 6-9 months ago, it would be reasonable to assume that other areas should now begin to follow-suit.ΓÇ£
ΓÇ£The question is how quickly will these regional markets follow the price recovery being seen in the heart of the Capital?ΓÇ¥
Andrew Coombs, non-executive director at officebroker.com and former Sales Director at Regus, the worldΓÇÖs largest provider of serviced office space, was also positive about the findings presented within the report:
ΓÇ£All in all this is an encouraging picture for the Central London market, demand is rising, prices are moving and term is increasing, clear indications of an improving marketΓÇ¥
Commenting on the increase in initial license length shown in the report, which rose from 7.3 months in Q3 2009 to 8.9 months during Q3 2010, Mr Coombs explained:
ΓÇ£Committed term is also improving and could be due to new tenantΓÇÖs realisation that the market has turned and prices are rising, which could be leading new customers to push for longer periods of contract termΓÇ¥
Given the focus on efficient use of office space that has been making headlines in recent months, particularly evident in the government and private office space mergers, it is perhaps unsurprising that businesses are taking advantage of the flexible terms offered by serviced office providers. But as Julie Grieve explains, the notion of serviced offices being merely a ΓÇ£short-termΓÇ¥ solution is beginning to diminish as businesses become increasingly aware of the advantages offered by serviced offices:
ΓÇ£Serviced offices offer great flexibility but they are by no means a place to stay for just a short while. We (Abbey) have a number of clients who have been with us over 10 years. This (the increase) shows that companies requiring the ability to flex their headcount up or down according to their business demands are also now appreciating the service levels provided by business centresΓÇ¥
ΓÇ£This service allow companies to get on with running their business rather than getting ΓÇ£boggedΓÇ¥ down and distracted with asset management issuesΓÇ¥
Continuation of the positive changes revealed in officebroker.comΓÇÖs Serviced Office Review: Central London Q3 2010 report will of course depend on the economy continuing to grow as predicted, particularly if this growth is to successfully radiate out to regional markets.
But with the wider impact of the GovernmentΓÇÖs austerity measures and upcoming VAT rise still unclear, will businesses and business confidence continue to deliver positive signs for the CapitalΓÇÖs serviced office space market?
The Serviced Office Review: Central London Q3 2010 report is available to download for free from the Stats & Facts area of www.officebroker.com or by clicking HERE.