Serviced Office Review: North West – Q4 10
The report focuses on the following key areas in the North West*** 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 the North West was compiled to provide a comparative report of the changes within the serviced office market during Q4 10 compared to Q4 09.
*** officebroker.com defines the North West region as areas located within the following postcode prefixes: BB, BL, CA, CH, CW, FY, L, LA, M, OL, PR, WA, WN.
- SUPPLY OF SERVICED OFFICE SPACE
The number of serviced office buildings registered with officebroker.com in the North West increased from 365 to 369
The total number of serviced office buildings registered with officebroker.com in the North West increased to 369 during Q4 10 ΓÇô representing a net increase of 4 buildings on the figure of 365 recorded at the close of Q3 10.
As shown in Fig 1, the number of serviced office buildings registered with the officebroker.com service has increased continuously since Q1 10, resulting in a17 building increase in the overall number of serviced office buildings choosing to register with officebroker.com in the North West.
officebroker.com currently lists 2,616 active serviced office buildings in the UK, the 369 serviced office buildings listed within the North West 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 increased by +18% overall in Q4 10
Quarterly Activity ΓÇô The total number of enquiries received by officebroker.com for serviced office space in the North West region increased by +18% in Q4 10 compared to Q4 09.
Year-to-Date Activity ΓÇô With a higher number of serviced office space enquiries being generated by officebroker.com during the opening and closing third of 2010, the overall number of serviced office space enquiries has risen +16% above 2009 levels during 2010.
National Comparison ΓÇô In Q4 10 officebroker.com recorded an overall increase of +42% in the number of enquiries received for serviced office space compared to Q4 09.
With an increase of +18% being recorded within the North West during this same period, it would appear that activity was diminished within the North West during Q4 10 compared to the activity recorded nationally.
* 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)
The number of new SOTS reduced by -27% in Q4 10
Quarterly Activity ΓÇô The number of businesses entering serviced office space via officebroker.com was -27% lower in Q4 10 than in the same 3 month period of 2009.
Year-to-Date-Activity ΓÇô The number of newly signed SOTs failed to exceed 2009 levels on all but one occasion during 2010, resulting in a -35% reduction in the overall number of new SOTs entering serviced office space in the North West between January ΓÇô December 2010.
National Comparison ΓÇô Across the UK, the number of new SOTs entering serviced office space during the final quarter of 2010 also reduced, with Q4 10 levels ending -26% below the levels recorded during Q4 09.
Given that SOT levels in the North West reduced by -27%, it would appear that the activity recorded nationally during Q4 10 has been reflected within this regional market.
Despite the changes that have occurred within the region during Q4 10, the actual number of SOTs taking serviced office space through officebroker.com in the North West was the 3rd highest of any UK region.
- AVERAGE WORKSTATIONS PER SOT
Average workstation requirement reduced to 4.1 in Q4 10
Quarterly Activity ΓÇô The average number of workstations per SOT totalled 4.1 at the close of Q4 10, an overall decrease of -22% compared to the average workstation requirement of 5.3 workstations per SOT recorded in Q4 09.
As shown in Fig 6, the reason that an overall decrease in workstation requirements occurred in Q4 10, was the absence of the larger requirements which had occurred during December 2009.
Year-to-Date-Activity ΓÇô Despite the decreased workstation requirements recorded in Q4 10, the rises occurring earlier in 2010 have produced an overall increase of +29% in the average workstation requirement of businesses entering serviced office space in the North West via officebroker.com in 2010.
Overall requirements increased from an average of 4.1 workstations in 2009 to 5.3 workstations in 2010.
National Comparison ΓÇô The average number of workstations per SOT increased nationally during Q4 10, rising marginally from 3.6 workstations in Q4 09 to 3.7 workstations in the same period of 2010.
The average requirement of 4.1 workstations recorded in the North West was the 3rd highest requirement of any UK region during Q4 10, with only Central London (5.0) and the North East (4.7) posting higher.
- SERVICED OFFICE SPACE COSTS
Average price per workstation reduced by -1%
Quarterly Activity ΓÇô The average price per workstation in the North West was ┬ú187.00 in Q4 10, a price that is ┬ú1.00 (-1%) lower than the average price of ┬ú188.00 recorded during Q4 09.
Year-to-Date Activity ΓÇô The average year-to-date workstation price in the North West is currently ┬ú167.00, a price which is ┬ú23.00 (-12%) lower than the average price of ┬ú190.00 recorded during 2009.
As shown by Fig 9, workstation prices across the North West have failed to exceed 2009 levels on all but two occasions during 2010. What is worth considering however, is that this latest price decrease means that the average workstation price recorded in 2010 is now ┬ú89.00 (-34%) below the 2008 price of ┬ú256.00.
National Comparison ΓÇô During Q4 10 the average price per workstation fell nationally by -3%, from ┬ú232.00 in Q4 09 to ┬ú226.00 by the close of Q4 10.
Average workstation prices in the North West were -┬ú39.00 lower than the national average recorded by officebroker.com during this same period.
- AVERAGE LICENSE LENGTHS
Initial license lengths increased to 9.0 months in Q4 10
Quarterly Comparison ΓÇô In Q4 10 new SOTs entering serviced office space in the North West through officebroker.com were signing average license lengths of 9.0 months, an increase of 2.1 months (+30%) on the average license length of 6.9 months recorded during Q4 09.
Year-to-Date Comparison ΓÇô The increase in average license lengths recorded in Q4 10 follows additional increases during the previous quarters of 2010, meaning that the average license length in the North West during 2010 was 8.5 months. This was 1.6 months longer than the 2009 average of 6.9 months.
National Comparison ΓÇô During Q4 10 license lengths averaged 8 months nationally, an increase of +14% on the average license length of 7 months recorded in Q4 09.
With an average license length of 9.0 months being recorded in the North West, businesses entering serviced office space via officebroker.com in this period were committing to license lengths that were 2 months longer than the national average for Q4 10.
When taking into account all the information for Q4 10, the following key findings can be drawn:
- Enquiry levels exceeded Q4 09 levels by +18% during Q4 10.
- SOT levels were -27% lower during Q4 10 than in Q4 09.
- Average workstation price remained within 1% of Q4 09 levels.
- Average license lengths continued to increase and were amongst the highest recorded in any UK region during the final quarter of 2010.
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