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CBRE and their joint venture partner Instant Offices recently provided figures showing serviced office take up in the West End. The published figures show there has been a gradual increase in take up of serviced offices since 2010 with a sudden step up in 2014 meaning over 400,000 sq. ft. of space is likely to be taken up by the end of the year. In comparison take up in 2011 was just 70,923 sq. ft. – a difference of 329,077; total serviced office space is currently at 3 million sq. ft. which shows a growth of 25% in the last two years!
As Britain has almost clawed itself out of the deep dark hole which was the recession, it seems too much of a coincidence that there has been a serviced office boom. Businesses are beginning to taste the sweet, crisp air of pre 2007 but are still all too conscious of the dangers that lie ahead – serviced offices have many benefits especially for the smaller, younger businesses; the greatest of which is the flexibility it provides. If the business rapidly expands, it can simply and quickly increase the size of office which is not something that cannot be easily achieved in a leased office. Similarly, if business isn’t so good they can downgrade without being stuck in an oversized office with equally oversized overheads. This flexibility reduces the risk for those more nervous, (or perhaps sensible) businesses, especially in a climate where it’s difficult to predict where it may be in two years’ time.
The comparatively high cost of serviced offices is not something to overlook but certainly for shorter term office space S/O’s are a sensible and driving force.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.