The world of commerce and industry is constantly evolving. The development of new technology, the increased ease of communication, and the economic impact of various factors on international industries all have a part to play, and those who are most successful when it comes to business are used to adapting.
One trend that looks set to stay is the recent rise in popularity of serviced offices from companies like LEO. Over the course of 2014, the UK serviced office industry saw phenomenal growth, increasing by double figures year-on-year. With this expansion so far continuing into 2015, is it time to review your rental choices to reach the top of your game?
These extraordinary figures come from the largest global broker of serviced office space, the Instant Group. Over the course of a single year, the company’s detailed statistics indicate that the number of serviced offices across the country rose by an incredible 3.6 per cent, with an 11.4 per cent increase in desk rates.
So how can we explain this trend? It seems that the pattern that is emerging is largely a response to socioeconomic factors, in particular the increase in rental prices in commercial centres such as London. This would explain why growth in the number of spaces has been as high as 17 per cent in Southbank, and 11 per cent in the West End.
The London Effect
The particular growth in London comes as little surprise when we look at the incredible increase in rental prices in the capital, and Tim Rodber, CEO of the Instant Group, backs up this hypothesis. He explained:
“The average rates in the capital have risen beyond levels previously seen at the height of the pre-recessionary market in 2008. This consistent growth provides further evidence of the increasing adoption of serviced office solutions among entrepreneurs and companies nationally.”
Unsurprisingly, then, this means that greater London now accounts for 30 per cent of the national market.
Other Commercial Centres
However, this trend has not been confined to the capital. The Instant Group’s detailed review of the sector revealed that although London postcodes consistently experienced growth of over 10 per cent, emerging centres also reported corresponding increases in average workstation rates.
One of the best examples of this trend is Manchester, where the market increased by an impressive 9 per cent. It was not alone in this expansion, with Aberdeen, Bristol, Glasgow, Edinburgh, Belfast, and Cambridge representing just a few of the other areas where significant growth occurred.
Looking to the Future
So, is this a trend we can expect to continue past 2015? The signs suggest that the answer is ‘yes’. As Tim Rodber states:
“In contrast to 2012 and 2013, we have seen limited use of rent free periods within serviced office contracts throughout 2014. This is a strong indication of a market in good health, and can be further witnessed in the average increase of workstation rates exceeding 10 per cent against 2013.”
The future looks bright for the serviced office sector.