2010 and Beyond
2010 has been a challenging year within the Serviced Office Space industry, with the short-term boost seen at the beginning of the year giving way to a period of tentative activity that appears to have stemmed the lasting impact of falling workstation prices which first began in 2008.
But as research data from officebroker.com reveals, key areas of the market have begun to show a notable shift in an upward direction ΓÇô so with this in mind we take a look back at the serviced office market in 2010 and ask if 2011 looks likely to build back toward pre-recession levelsΓÇª
January ΓÇô November 2010
Despite the opening quarter of 2010 recording average workstation prices ┬ú26.00 per workstation higher than in the same quarter of 2009 ΓÇô the first such increase since 2008 ΓÇô the following months saw workstation prices fall back but maintain a steady, upward trend that eventually brought them back in-line with 2009 prices.
The overall result of this activity is that the average workstation price across the UK in 2010 has remained within 2% of 2009 levels, suggesting that the rapid reductions in price witnessed throughout 2009* have largely stopped. If this is the case, then the relative stability that has established itself over the course of 2010 could form a solid base from which workstation prices could begin to recover.
Indeed key locations within the serviced office industry, such as the Central London market, have already begun to record price increases ΓÇô prompting senior figures from within the industry to acknowledge the possibility of a Central London led recover within the sector throughout the UK.
UK Regional YTD Price Changes*
(Jan ΓÇô Nov)
Region 2009 2010 +/-
Scotland ┬ú202.00 ┬ú235.00 +16%
Central London ┬ú467.00 ┬ú516.00 +10%
Wales ┬ú201.00 ┬ú207.00 +3%
South East ┬ú237.00 ┬ú243.00 +2%
North East ┬ú169.00 ┬ú170.00 +1%
East ┬ú229.00 ┬ú217.00 -3%
Greater London ┬ú280.00 ┬ú263.00 -6%
East Midlands ┬ú208.00 ┬ú193.00 -7%
West Midlands ┬ú195.00 ┬ú179.00 -9%
North West ┬ú192.00 ┬ú162.00 -16%
Yorkshire & Humberside ┬ú196.00 ┬ú164.00 -16%
South West ┬ú253.00 ┬ú198.00 -22%
Evidence that regional recover may have already begun to take hold can be seen within officebroker.comΓÇÖs year-to-date statistics, which reveals average workstation price increases occurred in 5 out of 12 UK regions in 2010, details of which are shown in the table below:
While the YTD price comparison demonstrates that the majority of UK regions are yet see a wholesale turnaround, better widespread news is delivered in a nationwide rise in both average workstation requirements (+6%) and license length, rising from an average of 6.9 months in 2009 to 8.1 months at the close of November 2010.
So are workstation prices returning from the brink? And will the increases in workstation requirements and license lengths continue into 2011? We would love to hear your opinion on what you think 2011 will deliver for the serviced office space industry!
*Based on officebroker.com data comparing UK average workstation price 2008 VS 2009.