News

FLEXIBLE MANAGED WORKSPACE MARKET IS PROSPERING IN ECONOMIC DOWNTURN

A national survey from the Business Centre Association (BCA)¹ has revealed a growth in demand for serviced offices and managed workspace.

Key findings in the BCA survey of its 750 members show an increase in the number of enquiries, a rise in average occupancy periods and a shift in the types of sectors seeking flexible space.

Sectors demonstrating an increased demand for flexible workspace include IT, media, retail support and insurance, while there has been a decrease in enquiries from sectors hit hardest by the recession such as construction, property and recruitment.

Centres reporting a significant increase in enquiries were those operating in a ‘niche’ environment, those nurturing specific sectors in particular: technology or design or those offering lifestyle facilities such as gyms, bars, restaurants and break-out facilities.

Jennifer Brooke, executive director of the BCA, the UK’s only trade association representing the business centre and managed workspace industry, says: “The survey suggests that the flexible space sector is weathering the recession as companies, be they start-ups or established businesses looking to downsize, are minimizing risk by moving away from the encumbrance of a traditional lease into flexible managed workspace.”

Evidencing the growth in the service office market, Abbey Business Centres has just announced its commitment to take on an additional 17,000 sq ft in order to meet demand for flexible serviced space in the prestigious 30 St Mary Axe building (‘The Gherkin’). The company now offers a total of 45,000 sq ft of office space in its Gherkin business centre and is 90 per cent occupied, proving that the combination of flexibility, location and price are essential ingredients to success.

Abbey’s managing director, Julie Calder, says: “Leads and enquiries have risen since last year and established clients are staying longer – this, is in part due to the unique locations we offer, but we have also received feedback that businesses are cautious taking on the commitment and responsibility of a conventional lease.

“We have always appealed to new and expanding companies; the average length of stay at a business centre has traditionally been lower than in the mainstream office market, where businesses sign up for five years or more – but the gap is narrowing as many clients are staying in excess of three years.”

Evans Easyspace lets business accommodation on flexible easy-in, easy-out terms

and reported a record number of lettings in March 2009. Tom Stokes, Managing Director of Evans Easyspace, reiterates what flexible space operators are saying: “Businesses do not want to take space on a conventional lease in the current risky economic climate.

“This, coupled with business downsizing and an increasing number of entrepreneurs entering the market, has resulted in the highest number of new lettings during the first quarter of this year in our serviced space throughout the UK.”

Brooke concludes: “Business centres account for approximately three per cent of total office space in the UK so there is still room for significant growth. I predict growth in the sector will come from the many SMEs who are moving into business centres due to the appeal they offer when compared to conventional leases.”

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1 Survey carried out by the Business Centre Association (BCA) in March 2009.


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