Serviced Office Market Snapshot: UK Key Cities, Q1 2013
It was the quarter when the UK narrowly avoided a triple-dip recession, while extreme weather threatened havoc for many UK businessesΓÇª We take a look at how the serviced office market fared across the UKΓÇÖs key cities in Q1 2013.
Overall, the UKΓÇÖs city centre market (for key cities excluding London) saw an increase in workstation rate of 3% compared with the same period in 2012, bringing the average rent to ┬ú214 per desk. The picture across the individual cities, however, was mixed, with a difference of almost ┬ú100 between the highest and lowest rental rates.
A similar picture was seen with take-up of office space, with some cities recording significant increases in the number of new serviced office tenants, while others experienced a marked decrease.
Birmingham: Cementing Second City status
There has been plenty of buzz about Birmingham in recent months, with many tipping it as one of the key locations for establishing a business in the UK. Serviced office activity for Q1 2013 appears to confirm this status, revealing a 50% increase in new serviced office tenants compared with Q1 2012.
While the average number of workstations per tenant saw a slight decrease from 6.9 to 5.7, the city still outperformed the UK national average of 4.5. Total serviced office space take-up amounted to a 24% increase.
Average price per workstation was also up 21% from ┬ú201 to ┬ú243, with rising occupancy levels and steady demand considered to be the primary reasons behind this increase.
Bristol: Highs and lows make for mixed results
The first quarter of 2013 brought mixed results for BristolΓÇÖs serviced office market, which recorded both the biggest price increase and the largest decrease in take-up of space among the key cities.
Average price per workstation increased from ┬ú214 to ┬ú264 ΓÇô a jump of 24%. However, the overall amount of office space rented decreased by 66%. While a drop in the overall number of new businesses was a contributing factor, the main driver appears to have been caused by a drop in the average number of workstations, which fell from 8.3 to 3.6 per tenant.
Edinburgh: Larger businesses, smaller prices
The number of new serviced office tenants in Edinburgh increased by 25% in Q1 2013. The size of businesses heading for the Scottish capital also increased, registering an average 6 workstations per tenant compared with just 3.8 for the same period in 2012.
But while larger businesses were moving in, the average rental cost per workstation dropped by 21% ΓÇô from ┬ú216 to ┬ú169 ΓÇô reflecting a demand for lower priced office space in the city.
Glasgow: More but smaller businesses
Like many of the key cities, Glasgow saw an increase in the number of businesses taking up serviced office space in Q1 2013 compared with the same period in 2012. And while the cost of workstations barely budged (an increase of just 1% on 2012), the size of businesses and the period of time they were willing to commit to their office space both decreased ΓÇô suggesting a boost in the startup and SME market in the city.
Leeds: Small businesses lead the way
Like Glasgow, Leeds has seen an increase in the number of small businesses entering serviced offices during Q1 of 2013. The average number of workstations per tenant has remained stable at 3, while average rent per workstation has seen a slight decrease, from ┬ú259 to ┬ú229.
The availability of lower rental rates may be one of the factors making the city centre increasingly attractive and accessible to small businesses. The city saw a surge in the number of new office tenants during Q1, a figure which more than trebled compared with the same period in 2012.
Manchester: Ambitious and affordable
Q1 in Manchester saw a marked increase in the size of businesses taking up serviced office space in the city centre ΓÇô with the average number of workstations increasing from 2.8 in Q1 2012 to 7.6 in Q1 2013. This meant that while the number of new serviced office tenants decreased by 50%, the total amount of space taken increased by 36% compared with the same period in 2012.
Despite ambitious developments in Manchester, its ┬ú197 average workstation price (an increase of 5% on Q1 2012) means that it remains competitively priced compared with other regional cities such as Birmingham, Leeds and Bristol ΓÇô all of which recorded average workstation prices in excess of ┬ú200.
Find out more: officebrokerΓÇÖs Serviced Office Reviews provide the latest data on the serviced office market across the UK, including essential overviews for the key cities and Central London. Explore the latest reports in the Knowledge Centre.