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The serviced office market is the most active it has ever been, and the providers are jostling for their market share. The top spot is currently held by Regus Group, a privileged position which they secured by their recent merger with Avanta. Subsequently, Regus covered 250 locations across 50 cities in the UK in April this year. However, the Competition and Market Authority (CMA) has raised concerns that there may not be sufficient competition in the serviced office market due to Regus’ spread in the UK after the Avanta Merger.
Whenever there is a lack of competition in a market, a monopoly can occur, and as a result customers face the risk of being offered less choice and higher costs.
Due to their concerns, the CMA has asked Regus to address the situation by potentially selling assets or reducing their presence in Hammersmith, Canary Wharf, Kings Cross, Euston, Victoria and Docklands among other areas. This could potentially open up new opportunities for other providers, such as WeWork, a company which is currently undergoing rapid expansion.
WeWork currently has 400,000 sq. ft. in operation, and another 600,000 sq. ft. under offer or ready to be completed. For the first time, the company is expanding into the Docklands, where it’s taking a 45,000 sq. ft. split over the top three floors at 7 West Ferry Circus, and more space is under offer on City Road, in The Atlas Building and at 3 Waterhouse Square, together adding up to 600,000 sq. ft. The growth plan is not just limited to London, as WeWork has secured office space in multiple buildings in Berlin and the Netherlands this year. The company’s gaze has also been set on other cities in central Europe such as Paris and Dublin, and is it likely that WeWork will secured spaces in these locations very soon.
Eugene O’Sullivan, Managing Director at Morgan Pryce, said: “Whenever there is limited competition in the marketplace, the importance for the tenants to do their research increases significantly. It’s gets difficult to get a clear view of what the market looks like, and so it can be a good option for tenants to consult with speaclist commercial property agents, particularly for leases of serviced offices.”
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.