The office market has spent the last five years changing radically. There are now other options. Lots of options!
The choice has become less binary between a lease or, perhaps, a serviced office space. There is now a plethora of options that business decision-makers need to consider.
Flexible workspace is currently very prominent in the news – driven in part by the wealth of news coverage around coworking and WeWork. Business leaders are starting to ask new questions of in-house real estate leaders, “What about WeWork? Could we use that type of space? Do we have to sign a lease?”. And it is not just the board asking questions, employees are asking managers, “Do I have to come to the office every day? Do you have any more locations? Can we take some other space?”.
Agile, modern businesses are having to move fast. They need to react to their clients’ demands and competitors’ strategies. They need to move into new, global markets, put in place project teams as well manage existing office estates, with all of their expiry dates, space efficiencies, building issues, landlord demands and so on. They value pace and resilience but all at the right cost! But in a new market, with more options than ever before, surely the right choice is out there?
What choices are there?
There are now 3,094 providers of flexible space within the UK, up from the 2,800 recorded in our last 2018 report. And more than 6,000 centres to choose from. The variety of space available is overwhelming. During 2019 we have seen the rapid expansion of multi-location providers across the UK market.
The progression can be seen in companies such as Landmark, Citibase, WeWork and Spaces, which all now hold at least 1% of the UK market for the first time. While London has remained a focus for these companies, expansion has also moved to secondary cities. Cities such as Edinburgh, Cambridge and Birmingham have all seen new increased focus as demand continues to grow. But across the UK, these lead suppliers, including IWG and WeWork, only make up 7% of supply – there are many more options out there from independent operators.
So, if you want to choose the best space for your business, what are the criteria you need to base that choice upon?
How to choose between a leased office or flex space…..? 16 Questions you should base your decision upon:
- Hefty upfront rental deposits required dependent on covenant strength (business profitability/ stability)
- Often between 3-9 months rent will be held as a deposit
- Fit out costs – partition walls for meeting rooms, kitchenette, office storage, furniture, printers etc
- Agent fees - typically 10% of one year’s rent
- Legal fees - paying lawyers to prepare the contracts
There are many other “hidden” costs of leased office occupation that are not included in the price per sq ft that is quoted to clients. These include being responsible for arrangement and payment of office cleaning, maintenance, mail handling, office facilities management e.g. broken printer/broken coffee machine/leaking sink etc.
In short, it’s a lot more labour intensive to run your own space - is there someone in the company that is prepared to take on this responsibility?
At the Instant Group, we offer our clients the choice of an aggregated market view. For clients, this resonates as a transparent, cost-effective approach to the workspace conundrum and we work very hard to ensure that the market works for them and they have access to as much choice as is relevant for their business.
To find your ideal office, our workspace specialists will undertake extensive searches with a network of trusted office providers (inc. landlords and commercial property agents). We share your enquiry details with them in order to locate the ideal space for you. A member of the Instant team or service office provider will be in touch with you by phone or email, shortly to discuss your requirements.
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