Serviced Office Review: East Midlands Q2 2010
This report focuses on the following key areas in the East Midlands ***:
Using the statistics from these areas, a detailed overview of the serviced office industry in the East Midlands was compiled to provide a comparative report of the changes within the serviced office market during Q2 10 compared to Q2 09.
*** officebroker.com defines the East Midlands region as areas located within the following postcode prefixes: DE, LE, NG, NN.
- SUPPLY OF SERVICED OFFICE SPACE
The number of serviced office buildings registered with officebroker.com in the East Midlands decreased from 106 to 105.
The total number of serviced office buildings registered with officebroker.com in the East Midlands decreased to 105 during Q2 10 ΓÇô representing a net decrease of 1 building on the figure of 106 recorded at the close of Q1 10.
As shown in Fig 1, the total number of serviced office buildings registered with the officebroker.com service has increased overall during the last 12 months, rising from 98 in Q3 09 to 105 by the close of Q2 10.
This means that the overall number of serviced office buildings choosing to register with officebroker.com in the East Midlands has increased by a total of 7 buildings within this twelve month period.
- DEMAND FOR SERVICED OFFICE SPACE
Q2 10 Enquiry Levels exceeded those of Q2 09 by +36% overall.
Quarterly Activity ΓÇô The total number of enquiries received by officebroker.com for serviced office space in the East Midlands increased by +36% in Q2 10 compared to Q2 09.
Year-to-Date Activity ΓÇô This additional +36% increase in enquiries recorded by officebroker.com in Q2 10 follows a +58% increase in Q1 10, meaning the overall number of enquiries received by officebroker.com for serviced office space in the East Midlands during the first half of 2010 were +47% higher than in 2009.
National Comparison ΓÇô During Q2 10 the total number of enquiries received by officebroker.com throughout the UK increased by +33% compared to Q2 09, indicating that the increases seen in the East Midlands are in-line with that of the UK national average during this same period.
* Effective from 1st February 2010, officebroker.com extensively expanded its online marketing and affiliate program.
As a direct result of this activity the number of enquiries received by officebroker.com increased substantially from February 2010 onward. Such increases, while generating abnormally large changes when placed against previous data, will ensure that the statistics reported by officebroker.com are an even more accurate assessment of the serviced office market here in the UK.
- NEW SERVICED OFFICE TENANTS (SOTs)
+23% change in the number of SOTs in Q2 10 compared to Q2 09.
Quarterly Activity ΓÇô The number of businesses taking serviced office space through officebroker.com increased by +23% in Q2 10 compared to Q2 09.
Year-to-Date Activity ΓÇô During Q1 10 the number of new SOTs taking space through the officebroker.com service also increased (+44%). Taking into account the overall activity recorded in the opening 6 months of 2010, the total number of SOTs entering serviced office space via officebroker.com is currently +32% higher than in 2009.
With the officebroker.com sales cycle averaging 59 days from initial enquiry to placement, it would appear that the additional enquiries generated in Q1 10 (+58%), a result of the increased marketing activity outlined in the previous section of this report, have helped to generate an increase in the number of SOTs taking office space in the East Midlands through officebroker.com during Q2 10.
National Comparison ΓÇô During Q2 10 the total number of SOTs taking serviced office space through officebroker.com increased nationally by +5% compared to Q2 09.
Having recorded a +23% increase in SOT numbers during Q2 10, the activity in the East Midlands is significantly above the national activity recorded by officebroker.com during this same period.
- AVERAGE WORKSTATIONS PER SOT
Average workstations per SOT increased from 2.8 in Q2 09 to 4.3 in Q2 10.
Quarterly Activity ΓÇô The average number of workstations per SOT totalled 4.3 at the close of Q2 10, an increase of +53% on the average workstation requirement of 2.8 per SOT recorded in Q2 09.
The large increase in average workstation requirements recorded in Q2 10 was driven by a number of higher volume deals taking place which had not been present in the East Midlands during Q2 09.
Year-to-Date Activity ΓÇô With the +53% increase recorded in Q2 10 helping to counter the -32% decrease in average workstation requirements previously recorded during Q1 10, overall workstation requirements in the East Midlands during the opening 6 months of 2010 remain within 3% of 2009 levels overall.
National Comparison ΓÇô The average number of workstations per SOT throughout the UK increased from 3.8 in Q2 09 to 4.5 at the close of Q2 10 ΓÇô a rise of +16%.
Comparing this national activity to that of the East Midlands in Q2 10, the percentage increase recorded within the region (+53%) is significantly higher than the national average during this same period, with the resulting workstation requirement (4.3) falling in-line with national levels.
- SERVICED OFFICE SPACE COSTS
Average price per workstation decreased by -25% in Q2 10 compared to Q2 09.
Quarterly Activity ΓÇô The average price per workstation in the East Midlands was ┬ú166.00 in Q2 10, a decrease of -25% on the average price of ┬ú223.00 recorded in Q2 09.
Year-to-Date Activity ΓÇô Having recorded a +27% increase in average workstation prices during Q1 10, the result of the activity in Q2 10 means that overall average workstation prices in the East Midlands are currently -4% lower in the opening 6 months of 2010 than in the same period of 2009.
National Comparison ΓÇô During Q2 10 the average price per workstation fell nationally by -13%, from ┬ú274.00 in Q2 09 to ┬ú238.00 by the close of Q2 10.
Having recorded a larger percentage decrease in average workstation price in the East Midlands (-25%) compared to this national average, the average price per workstation in the East Midlands also remained ┬ú72.00 (-30%) below that of the national average during Q2 10.
Having recorded an average workstation price of ┬ú166.00, workstation prices within the East Midlands were the second lowest of any UK region during Q2 10, with only the North East (┬ú164.00) recording a lower average workstation price during Q2 10.
- AVERAGE LICENSE LENGTHS
Initial license lengths increased to 7.3 months in Q2 10 from 6.4 in Q2 09.
Quarterly Activity ΓÇô In Q2 10 new SOTs entering serviced office space in the East Midlands through officebroker.com were signing average license lengths of 7.3 months, an increase of 0.9 months (+14%) on the average license length of 6.4 months recorded during Q2 09.
Year-to-Date Activity ΓÇô The increase in average license lengths recorded in Q2 10 follows a -24% decrease in the average license lengths in Q1 10. The overall result of this activity means that average license lengths in the East Midlands during the first 6 months of 2010 are currently -8% lower than during the same period of 2009.
National Comparison ΓÇô During Q2 10 license lengths averaged 7.3 months nationally, an increase of +6% on the average license length of 7.0 months recorded in Q2 09.
With an average license length of 7.3 months being recorded in the East Midlands, businesses entering serviced office space via officebroker.com during this period were trending in line with that of the national average during Q2 10.
When taking into account all the information for Q2 10, the following key findings can be drawn:
- Enquiry levels increased by +36% during Q2 10, building upon the previous increase recorded in Q1 10.
- The overall number of new serviced office tenants increased by +23%.
- Average workstation price decreased in Q2 10 and were significantly below national levels.
- Average license lengths increased in line with the national activity recorded during Q2 10.
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