The routes to renting office space in the South West are evolving with the traditional leased office under threat from more flexible options. Matthew Read, director of serviced office provider Rombourne, looks at some of the alternatives on offer and compares the strengths of each.
How many people will your company employ in five years’ time? Will they be based where you are now or might you need to move some of them around the country? If you’re not confident that you can answer those questions with certainty you might want to pause before signing your next office lease.
Traditionally, office landlords sign tenants up for five year leases, or longer. While that may suit the landlord well it’s not necessarily what is best for the tenant. And in recent years alternatives have become increasingly popular as a closer fit to what a company may really need.
if you will be looking to upsize or move at short notice, want to play it safe in a shaky economic climate, or need to accommodate a new team project that may be fairly short lived, flexible working arrangements may suit you better.
The big buzzword of the moment is coworking, where typically you will rent a number of desks alongside other companies in an open-plan office. Popular with entrepreneurs and freelancers, coworking spaces enable you to mix with others, sharing ideas and knowledge as well as photocopiers and kitchen facilities.
You only pay for what you need, services are included and agreements can be incredibly flexible – you may actually be able to rent a space for just a month at a time.
But coworking is not for everyone. The close proximity to, and mixing with, other companies’ personnel can be distracting and may not fit your own company’s ethos.
A slightly more traditional – but increasingly popular solution – is the serviced office sector, which sits between short-term coworking and full traditional leases. Options range from budget accommodation to very prestigious office suites, which come fully fitted with phones, furniture and IT connections – all ready to move in to, available at short notice and on very flexible rental terms.
At Rombourne in Bristol we have 1000 serviced office ‘desks’ in private office suites of various sizes, and in prime city centre, suburban and out-of-town business park locations. We find that they suit all sorts of businesses – from one-man bands, to small growing companies, to very large corporations. Some need us for a just a few months, while others have been in Rombourne offices for more than 15 years.
But how do costs compare? A quick glance will show that traditional office lease rents are much lower, but that doesn’t take into account all the other costs of occupation. A Total Office Costs Survey by Actium Consult showed that the office rent was just one third of the total cost of being in an office lease. On top of this companies need to factor in business rates (15%), annualised costs (14%), hard FM (23%), soft FM (11%) and management (3%).
In serviced offices rates, maintenance, cleaning, security, IT infrastructure and updating, utility bills, and reception duties are all managed on your behalf and are included in the single monthly charge.
So once you compare all the costs of traditional leased offices against the single charge with a serviced office the gap is very much smaller – or even non-existent. And many find the budgeting certainty of the all-in charge offered by serviced offices very compelling.
But time and again we hear from our clients that the thing they most value from being in serviced office accommodation is the flexibility it brings to their company, enabling them to scale up or down as contracts are won or come to an end, or the number of people needed in any part of the country changes.
If they need more space they can add additional suites in a matter of days – and move into fully-furnished offices without any delay in dealing through solicitors to sign leases, buy furniture, or invest in the IT infrastructure. They simply move their staff and files into position, plug in their computers and start work.
And the recent (Y)our Space research report by global property consultancy Knight Frank showed that even global corporates intended to operate increasingly from flexible, serviced and co-working spaces. Over half of companies (55%) identified increased flexibility as the main driver of this change. A further 11% stated that the greater speed to becoming operational was their primary reason for selecting serviced office or co-working space ahead of more conventional office space.
