Olympic-sized opportunities for serviced offices in Greater London
Statistics from officebroker.com for Greater London office space show an inconsistent level of enquiries throughout the year to date. While this may be a knock-on effect from the recession due to businesses holding back through financial difficulty, it may be plausible to assume that businesses who have already won contracts to supply the 2012 Olympics would be searching for offices close to the venue, in order to ensure a more professional offering.
However, based on 2009 enquiry levels and when compared to 2008, the Games currently appear to have had little effect on the level of enquiries.
As represented by the below graph, June produced the first significant result of the year – a 35% increase over the previous month, which became the second highest enquiry figure of the year to date. June was also up 20% over the same period last year – the best year-on-year result of the year so far.
July then dropped by -18% and August only improved by 4% month-on-month.
Interest in the region then peaked in September 2009 – producing a 19% increase from August to conclude the third quarter on a positive note, which resulted in the highest enquiry level of the year to date. September 2009 was also up 7% when compared to the same month in 2008.
However in October, the start of 2009’s final quarter, enquiries for Greater London dipped again, this time by -6% month-on-month, and -4% when compared to October 2008.
See the below graph for a year-on-year comparison of enquiries over the first ten months of 2009, compared to the same period in 2008:
Over recent months enquiries in the region have shown improvement when compared to the earlier part of the year – particularly September, which has produced the highest figure of the year so far. Initially this could be partly attributed to the London 2012 Olympic Games, as it would seem probable that interest in Greater London office space would be picking up as businesses compete for contracts.
Stephen Preston, officebroker.com’s Client Relations Director and Team Leader for parts of Greater London, has seen a number of enquiries coming in throughout the year from businesses in many different parts of the UK who need office space in the capital, especially in the East and Central areas.
“We’ve had enquiries coming in from all over the country from business owners who are looking for space to fulfil their Olympic contracts,” says Stephen. “One example is a firm from Newcastle that was involved in acoustics.”
Stephen believes that the timing of the office search depends on the trade in which the business is associated.
“It really depends on their industry. I noticed a lot of interest around 6 months ago, but overall we’re getting a steady flow of enquiries from a wide variety of firms. They’re not necessarily looking for space for the duration of the Games as many of them are involved in the preparation, such as construction companies. Others, such as IT specialists or analysts, would probably need to be there closer to the time.”
With the Games still two and a half years away, there is plenty of time for those companies to search and take up space. Plus the flexible nature of serviced offices means that companies are able to consider space on a short time-frame.
For example, serviced offices focus predominantly on short-term space under flexible contracts, and firms often take space for a matter of months as opposed to a year or more. Therefore the enquiry rate of offices for this region is likely to depend largely on the project timeframes of the Olympic preparations.
officebroker.com statistics show that the average length of license initially signed by new occupiers for serviced offices in Greater London was 4.5 months (average length of time based over the first ten months of 2009). Therefore for firms specifically targeting serviced or managed offices, they are more able to pursue space closer to their project start date – something that is usually much more difficult when considering a conventional lease agreement.
For firms struggling in the difficult financial climate, this also provides more time to budget for the cost of renting an office.
Despite being a predominantly London-based event, the Government has been keen to promote the Games to businesses all over the UK – in fact this formed part of the basis of their winning pitch, and the team behind the Games expect that the event will help the UK emerge from recession.
In a foreword to a Government report published on Monday 23rd November 2009, Olympics minister Tessa Jowell said:
“Whether for a basketball arena from Glasgow or structural decking from Poole, wetland planting from Norfolk or steel reinforcements from Neat, this is a powerful illustration of how London 2012 is helping the whole of the country to ride out the downturn and plan for recovery.”
Businesses from all across the UK have already been winning contracts to supply products and services for the Olympics.
Sam Turvey, communications manager at the British Chambers of Commerce, said: “It seems to us that other British chambers around the country have been actively encouraging their members to bid for these contracts.”
Recent figures released by the government show that 98% of Olympic contracts have been awarded to UK firms, including those as far afield from London as Scotland and Wales. For example, in the construction of the Olympic Stadium and Aquatics Centre roof, firms from Scotland, Bolton and Wales were contracted to design features such as an electrical substation, and to supply the steel used in the new stadium.
With the short-term, flexible nature of serviced offices, interest in Greater London office space could soon begin to show an increased level of interest, as businesses based in other areas of the country determine the need to be closer to the capital.
Whether these firms need to be based in London for the duration of the Games, or for the lifetime of a project in the run-up to the event, serviced offices in Greater London provide the ideal flexible solution for firms seeking space for a short or indeterminable length of time.
For more details in relation to serviced offices in Greater London, speak to Stephen direct or one of our regional advisors for a free consultancy service, or search online for suitable locations at officebroker.com.
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