The rise of the serviced office
The commercial property and office space market has many different types of product on offer, with many different agreements ranging from ten-year building leases, to short-term one-person workstations. We’ve already explored the benefits of each type of office agreement and which is best for you as a potential tenant, in our article ‘Which office space agreement is best for me?’
But in today’s economic climate, how valuable is the serviced office – and is it the answer to cost-cutting and affordable working environments?
Here at officebroker.com we’ve noticed a steady shift in the behaviour of clients who are searching for office space. Not so long ago, there were several factors that mattered to future tenants, and price didn’t always occupy the top spot. Many favoured location or transport links as the most important factor of their new office. But since the credit crunch took hold we’ve seen how this has taken effect, as most of our clients are now stressing the importance of an affordable office space, with other factors following as distant runners-up.
In fact, a recent survey by Drivers Jonas on office space in Birmingham has shown that businesses now value cost as the top key factor, with aspects such as convenience for staff, image, and location following behind. Visit our Birmingham office space survey blog post for further details on the survey results.
In terms of office agreement, here at officebroker.com we’ve noticed a huge increase in popularity of the serviced office, something which can lend itself at least in part to our current economical climate. Many businesses are striving to cut costs and are looking for cheaper office alternatives – and that’s where the serviced office comes in.
As opposed to the traditional lease agreement, which tied companies in for long periods of time, the serviced office has many appeals for businesses looking to downsize or save money. Flexibility is a key factor, as the minimum term is usually just 12 months – sometimes less. It’s ideal for businesses that are testing the market or a new location. Also, with a serviced office, clients need only fill the space they need, which makes the process cheaper and more fitted to the size of their business.
On top of that, serviced offices are usually easier to maintain, as they often come with furniture and facilities supplied by the landlord or provider, along with extras such as broadband, phone lines, and installed cabling. An IT or software technician is also typically on hand to take care of any technical issues, thus helping the client’s business to run more smoothly. Factors such as this appeal to businesses and assist in overall cost-cutting procedures, as buying new furniture and employing IT contractors to resolve issues can be an expensive burden.
More recently, at officebroker.com we’ve noticed that office providers are becoming more and more willing to enter into an agreement with clients without a deposit. For clients who have cost at the top of their agenda, this is obviously a huge attraction.
Another trend we’ve noticed at officebroker.com is the rise in clients searching for one or two-person workstations. As the credit crunch bites and businesses struggle to make ends meet, many employees are facing redundancy. A rising number of these are turning their situation around and taking the opportunity to set up their own business. If you’re one of this growing number who needs an office to start up on your own, the serviced office is an ideal solution. It allows you to pay for a small amount of affordable office space, but still enjoy the benefits of being in a work environment, with the support of other like-minded business people and office facilities on tap.
In addition to making requests for smaller office space, we’re also noticing a growth in popularity of the virtual office. If you work from home or who don’t want or need a physical office, the virtual office could be an ideal solution. All mail is sent to a physical office and calls are answered by a receptionist in your company name, but you’ll save money but not managing your own office – you can simply carry on working from your current location.
The virtual office is perfect for smaller businesses as it projects a more successful image. Individuals can keep their virtual office on a flexible monthly agreement for as long as they need, but will also have the option of moving into a physical office when the time comes. In fact some clients choose to stay with their office provider, and move into a physical space within the same provider’s building once they can afford to do so.
Even with the current state of the economy, at officebroker.com we’ve found that enquiries are still flooding in, and businesses are actively searching for office space. Many are turning to serviced offices for a cheaper and more manageable solution, which is good news for office providers and the market in general. The property office market is proving itself as highly adaptable, even in today’s economy. The virtual office and deposit-free agreements are just two such examples of how the market is responding to the needs of clients, and showing its ability and potential to thrive, however difficult the circumstances.