Things have changed so dramatically in the last five years and I would go as far as to say that we are now in the midst of a workplace revolution. Serviced offices have come of age.
There are several factors contributing to this, but advances in technology are able to deliver far more reliable and flexible solutions that are cloud based and can therefore be accessed from anywhere. Also the demand is now being driven by a younger and more versatile work force which means employers need to be able to offer flexibility that only serviced offices can provide.
We should also acknowledge WeWork who have done a huge amount in this area to bring a new and exciting alternative proposition to the market. They now have 18 centres in London that are modern and funky, and they have tapped into a demand for co-working which is now an established way for both individuals and company employees to work which is both cost effective and flexible. WeWork centres can be up to 80,000 sq. ft, giving a variety of workplace solutions all under the same roof which is attractive to corporate occupiers.
This surge in demand has not gone unnoticed by landlords who would be foolish to think this is a fad, but it is a fundamental change in the way people now use office space. For the first time landlords are now looking to deliver their own managed space, which frankly is an obvious move as they can cut out the margins taken by operators who are simply leasing space from them to sell on.
This is all very exciting, but City Skyline has been operating in Surrey for ten years and these changes are only slowly filtering down into the regional towns.
There is both a supply and a demand issue. Serviced office operators like ourselves are in the business of taking some risks which we accept as part of the business model, but it has to be a calculated risk based on the underlying demand.
Despite property and operating costs nearly doubling in town centres like Kingston, Guildford and Leatherhead in the past ten years, desk rates have hardly kept up with inflation. This is an issue clearly and although I would agree that the choice of good quality serviced offices is limited in many town centres, without more consistent and better-quality demand from SME’s and the corporate sector this will continue to be the case.
It is frustrating that demand has also been slowing over the last year due to the Brexit fiasco and the economic climate, which means fewer start-ups and requirements generally which are needed to give operators the confidence they will need to invest in new centres.
City Skyline have centres in Global House, Epsom and Coombe Road, New Malden. Call 0800 505 4444 or email firstname.lastname@example.org for further details.