Serviced Office Review: Greater London Q4 10
This report focuses on the following key areas in the Greater London*** region:
- Supply of and demand for serviced office space – In terms of the number of enquiries, the size and shape of those enquiries and the number of placements
- New Serviced Office Tenants (SOTs) – In terms of workstation prices and initial license length commitment
Using the statistics from these areas, a detailed overview of the serviced office industry in Greater London was compiled to provide a comparative report of the changes within the serviced office market during Q4 2010 compared to Q4 2009.
***officebroker.com defines the Greater London region as areas located within the following postcode prefixes: BR, CR, E, EN, HA, IG, KT, N, NW, RM, SE, SM, SW, TW, UB, W.
- SUPPLY OF SERVICED OFFICE SPACE
The number of serviced office buildings registered with officebroker.com in the Greater London region increased to 372
The total number of serviced office buildings registered with officebroker.com in Greater London increased to 372 during Q4 10 ΓÇô representing a net increase of 14 serviced office buildings on the figure of 358 recorded at the close of Q3 10.
As shown in Fig 1, the overall number of serviced office buildings registered with officebroker.com has grown quarter-on-quarter, resulting in a 5% increase in the total number serviced office buildings registering with the officebroker.com service between January ΓÇô December 2010.
officebroker.com currently lists 2,616 active serviced office buildings in the UK, the 372 serviced office buildings listed within the Greater London region accounts for 14% of the total UK supply offered / available through the officebroker.com service.*
*Information correct at time of publication.
- DEMAND FOR SERVICED OFFICE SPACE
Enquiry levels in Q4 10 exceeded those of Q4 09 by +44% overall.
Quarterly Activity ΓÇô The total number of serviced office space enquiries received by officebroker.com for the Greater London area was +44% higher in Q4 10 than in the same period of 2009.
Year-to-Date Activity ΓÇô Having successfully generated greater enquiry levels month-on-month throughout 2010, the accumulative effect is a +38% increase in the total number of serviced office space enquiries channelled through the officebroker.com service when compared to 2009 levels.
National Comparison ΓÇô During Q4 10 the overall number of enquiries received by officebroker.com in the UK increased by +42%, indicating that the number of new leads officebroker.com has been able to generate in Greater London was slightly higher than in other areas of the UK during Q4 10.
* 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)
New SOT levels were -28% lower overall in Q4 10
Quarterly Activity ΓÇô The number of businesses entering serviced office space via the officebroker.com service in Greater London was -28% lower in Q4 10 than in the same period of 2009.
Year-to-Date Activity ΓÇô The number of new SOTs entering serviced office space through the officebroker.com service has diminished during 2010, with the overall number of new SOTs being -15% lower than the 2009 total at the close of 2010.
National Comparison ΓÇô During Q4 10 the total number of SOTs taking serviced office space through officebroker.com was -26% lower than in Q4 09.
With a decrease of -28% recorded in Greater London, it would appear that the average activity recorded in the UK during this same period has also been reflected within the Greater London region.
Despite the decrease on 2009 levels which occurred in Q4 10, the Greater London region continues to account for the highest number of new individual SOTs placed by officebroker.com in the UK, with the new SOTs placed in Greater London accounting for 19.7% of all UK SOTs placed during Q4 10 by officebroker.com
- AVERAGE WORKSTATIONS PER SOT
Average workstations per SOT decreased to 3.5 in Q4 10
Quarterly Activity ΓÇô The average number of workstations per SOT totalled 3.5 at the close of Q4 10, a marginal decrease (-5%) on the workstation requirement of 3.7 per SOT recorded in Q4 09.
Year-to-Date Activity ΓÇô Despite having recorded average workstations requirements in excess of 2009 levels during the opening period of 2010, the absence of larger requirements – such as that recorded in August 2009 – have resulted in little change taking place overall, with a minimal (-3%) difference between the 2010 average of 4.7 workstations per SOT and the 4.6 per SOT requirement in 2010.
National Comparison ΓÇô The average number of workstations per SOT throughout the UK increased during Q4, edging-up from 3.6 workstations per SOT in 2009 to 3.7 workstations per SOT in 2010.
While the Year-to-Date activity outlined above clearly shows Greater London to have a higher average workstation requirement than the majority of the UK overall, during Q4 10 the regional requirement fell back and failed to reflect this trend.
- SERVICED OFFICE SPACE COSTS
Average price per workstation increased to ┬ú277.00 in Q4 10
Quarterly Activity ΓÇô The average price per workstation recorded in Greater London was ┬ú277.00 in Q4 10, a increase of ┬ú4.00 (+2%) on the average price of ┬ú273.00 recorded in the same period of 2009.
Year-to-Date Activity ΓÇô During 2010 workstation prices in Greater London have decreased by an average of -6%, falling from an average of ┬ú282.00 per workstation in 2009 to ┬ú267.00 per workstation during the same 12 month period of 2009.
What is of particular note is that the year-to-date average of ┬ú267.00 per workstation in 2010 is still ┬ú73.00 (-21%) below the average price of ┬ú340.00 recorded at the close of 2008.
National Comparison ΓÇô During Q4 10 the average price per workstation reduced nationally in the UK, falling by ┬ú6.00 (-3%) from ┬ú232.00 in Q4 09 to ┬ú226.00 per workstation in Q4 10.
- AVERAGE LICENSE LENGTHS
Initial license lengths increased to 8.5 months during Q4 10
Quarterly Activity ΓÇô In Q4 10 new SOTs entering serviced office space in Greater London through officebroker.com were signing average license lengths of 8.5 months, an increase of 1.8 months (+26%) on the average license length of 6.7 months recorded during Q4 09.
Year-to-Date Activity ΓÇô Having remained within 1% of 09 levels during Q1 and Q2 of 2010, the increases recorded in the second half of 2010 have resulting in an +18% increase in average license lengths overall within the Greater London area ΓÇô rising from 7.0 months in 2009 to 8.2 months in 2010.
National Comparison ΓÇô During Q4 10 license lengths averaged 8 months nationally, an increase of 1 month (+14%) on the average license length of 7 months recorded in Q4 09.
With average license lengths in Greater London (8.5 months) exceeded the national average (8.0 months) by 0.5 months, it would appear that those businesses entering serviced office space within Greater London are demanding requirements greater in size than that of the UK average.
When taking into account all the information for Q4 10, the following key findings can be drawn:
- The number of enquiries generated by officebroker.com continued to exceed 2009 levels during Q4 10.
- The overall number of new serviced office tenants decreased in Q4 10.
- Average workstation price exceeded 2009 levels during Q4 10.
- Average license lengths increased and surpassed the UK national average during Q4 10.
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