The Office Space Divide & Re-Jigged Geography
This week the great North/South divide has once again been making headlines, with the lesser fortunes of ΓÇ£the northΓÇ¥ being highlighted in data from Experian / BBC that lists only one location outside of the ΓÇ£southΓÇ¥ in the UKΓÇÖs top 50 sites in terms of the value of its office space.
In order to view this phenomenon from within our specialist office sector, we here at officebroker.com decided to explore the effects of this divide via the fortunes of the serviced office space sector within both the ΓÇ£northΓÇ¥ and the ΓÇ£southΓÇ¥ since the beginning of 2010.
The first task in this process was of course to identify where this mystical boundary actually was – with the geographical assumptions of my Midlands upbringing being challenged very early on.
As a Midlander I have to admit that I consider myself to be neither from the North or indeed the south ΓÇô I am, as the name would suggest, from the Middle. But according to both the BBC and research from Sheffield University* I should abandon my misplaced regional identity and proclaim myself a person of the North ΓÇô unlike those from nearby LeicesterΓÇª or indeed the north easterly Lincoln who are apparently of the southern persuasion.
But despite my geographical reservations our frontline was set, with a steady line rising from south Gloucester and ending a short drive to the tip of Grimsby.
Then of course came the serious bit, with our internal data being edited down to section the serviced office space markets of the ΓÇ£northΓÇ¥ and ΓÇ£southΓÇ¥ ΓÇô albeit with a somewhat broad brush stroke.
The result of this process was to reinforce the stated fortunes of each area, with activity in the ΓÇ£southΓÇ¥ appearing positive while the ΓÇ£northΓÇ¥ lagged behind. Probably the most telling statistic of this micro-study was the difference in the overall number of individual businesses placed since the beginning of 2010.
Based on year-to-date activity, the number of businesses taking-up office space through the officebroker.com service in the ΓÇ£southΓÇ¥ increasing by 6%, while in the ΓÇ£northΓÇ¥ a 17% decrease was recorded ΓÇô a result which would suggest that business activity in the northern half of the UK between January ΓÇô August 2010 was reduced.
Assessing the collective fortunes of this two office nations also highlighted a noticeable difference in the average workstation price (The price charged per desk per month) of the serviced offices operating north and south of the unmarked border, with the average workstation price in the ΓÇ£southΓÇ¥ being ┬ú293.00 ΓÇô a price that is ┬ú115.50 (+65%) higher than the average price of ┬ú177.50 recorded in the ΓÇ£northΓÇ¥.
The ΓÇ£southΓÇ¥ also recorded a greater rise in serviced office space enquiries but recorded smaller workstation requirements and shorter initial sign-up periods than that of the ΓÇ£northΓÇ¥ ΓÇô suggesting a greater number of employees are being catered for by northern businesses and that their commitment / confidence in the short-to-midterm is greater.
Of course the big issue with such broad based analysis is that it is just that ΓÇô broad based, with the strong results seen in individual markets such as the West and East Midlands being washed away by the weaker results recorded in other areas of the market. Even in the seemingly more positive ΓÇ£southΓÇ¥ the individual growth recorded in areas such as East Anglia and the M1 corridor, which saw a 33% increase in the number of businesses being placed, are seen to suffer the same washed out fate.
For anyone outside of the serviced office space industry, the reason that the activity within this area of the property market is of note is because of the types of businesses that utilise it.
While serviced office space is used by everyone from start-ups to blue chip internationals, it is its support of the SME sector that makes the activity recorded within it a useful gauge for the general health of local, regional and national business ΓÇô with the SME sector almost continuously linked to the future success of the UKΓÇÖs economy.
For anyone interested in reading a description of what serviced office space is I have included a link to an article covering this below:
Article: What is Serviced Office Space?
Further research from officebroker.com on serviced office space can also be accessed by visiting the Stats & Facts section of our website.
* Source: North / South Divide ΓÇô University of Sheffield research ΓÇô England Only