Serviced Office Review: North East Q2 10
This report focuses on the following key areas in the North East *** region:
Using the statistics from these areas, a detailed overview of the serviced office industry in the North East 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 North East region as areas located within the following postcode prefixes: DH, DL, NE, SR, TS
- SUPPLY OF SERVICED OFFICE SPACE
The number of serviced office buildings registered with officebroker.com in the North East increased from 107 to 109.
The total number of serviced office buildings registered with officebroker.com in the North East increased to 109 during Q2 10 ΓÇô representing a net increase of 2 buildings on the figure of 107 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 grown continuously during the last 12 months, rising from 78 in Q3 09 to 109 by the close of Q2 10.
This means that the overall number of serviced office buildings choosing to register with officebroker.com has increased by 31 buildings (+39%) within this 12 month period.
- DEMAND FOR SERVICED OFFICE SPACE
Q2 10 Enquiry Levels exceeded those of Q2 09 by +16% overall.
Quarterly Activity ΓÇô The total number of enquiries received by officebroker.com for serviced office space in the North East increased by +16% in Q2 10 compared to Q2 09.
Year-to-Date Activity ΓÇô This additional +16% increase in enquiries recorded by officebroker.com in Q2 10 follows a +83% increase in Q1 10, meaning the overall number of enquiries received by officebroker.com for serviced office space in the North East during the first half of 2010 was +50% 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.
This national activity indicates that the percentage increase seen in the North East (+16%) during Q2 10 was below that of the national average recorded by officebroker.com.
* 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)
0% 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 remained unchanged in Q2 10.
Year-to-Date Activity ΓÇô During Q1 10 the number of new SOTs taking space through the officebroker.com service was lower than in Q1 09 (-57%), meaning that the overall number of SOTs taking space via officebroker.com in the North East is -46% lower in the opening 6 months of 2010 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 (+83%), a result of the increased marketing activity outlined in the previous section of this report, are yet to help secure a greater number of SOTs taking office space in the North East region 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 0% change in SOT numbers during Q2 10 in the North East, national activity during this same period is shown to be higher.
- AVERAGE WORKSTATIONS PER SOT
Average workstations per SOT rose from 3.3 in Q2 09 to 9.0 in Q2 10.
Quarterly Activity ΓÇô The average number of workstations per SOT totalled 9.0 at the close of Q2 10, an increase of +176% on the average workstation requirement of 3.3 per SOT recorded in Q2 09.
This abnormally large change, as shown in Fig 6, was however skewed by a series of deals with larger workstation requirements – unmatched in the North East during Q2 09.
Year-to-Date Activity ΓÇô Despite recording a decrease in average workstation requirements during Q1 10, which fell from 5.8 workstations in Q1 09 to 3.9 workstation in Q1 10 (-33%), the overall workstation requirements of those entering space through the officebroker.com service in the North East were +43% higher, rising from an average of 4.5 workstations in 2009 to 6.5 workstations during the opening 6 months of 2010.
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 – a rise of +16%.
Comparing this national activity to that of the North East in Q2 10, both the percentage increase (+176%) and average workstation requirement (9.0) within the region were significantly higher than the national averages recorded by officebroker.com during the same period.
- SERVICED OFFICE SPACE COSTS
Average price per workstation decreased by -6% in Q2 10 compared to Q2 09.
Quarterly Activity ΓÇô The average price per workstation in the North East was ┬ú172.00 in Q2 10, a decrease of -6% on the average price of ┬ú183.00 recorded in Q2 09.
Year-to-Date Activity ΓÇô Having also recorded a decrease of -5% in average workstation prices during Q1 10, average workstation prices in the North East are -5.3% lower between January ΓÇô June 2010 compared to the same period of 2009 according to the data collected by officebroker.com.
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.
While the percentage decrease recorded by officebroker.com in the North East (-6%) is lower than the national average (-13%) during this same period, the average workstation price within the North East (┬ú183.00) is substantially lower than that of the national average (┬ú238.00).
This means that during Q2 10 average workstation prices in the North East were ┬ú55.00 (-23%) lower than that of the national average recorded by officebroker.com in Q2 10.
- AVERAGE LICENSE LENGTHS
Initial license lengths increased to 6.4 months in Q2 10 from 4.1 in Q2 09.
Quarterly Activity ΓÇô In Q2 10 new SOTs entering serviced office space in the North East through officebroker.com were signing average license lengths of 6.4 months, an increase of 2.3 months (+55%) on the average license length of 4.1 months recorded during Q2 09.
Year-to-Date Activity ΓÇô The increase in average license lengths recorded in Q2 10 follows an overall increase of+7% in the0 average license length recorded in Q1 10, meaning that average license lengths in the North East during the opening 6 months of 2010 are +23% (1.4 workstations) higher 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 6.4 months being recorded in the North East, businesses entering serviced office space via officebroker.com during this period were committing to 0.9 months less (-12%) compared to the national average during Q2 10.
The average license length of 6.4 months within the North East was the second lowest of any UK region during Q2 10, with only the South West (6.3) region recording a lower average license length in Q2 10.
When taking into account all the information for Q2 10, the following key findings can be drawn:
- Enquiry levels increased by +16% during Q2 10, building upon the previous increase recorded in Q1 10.
- The overall number of new serviced office tenants remained unchanged.
- Average workstation price fell below 09 levels for the 2nd consecutive quarter.
- Average license lengths exceeded Q2 09 levels in Q2 10 but were one of the lowest average levels recorded in any UK region.
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