Flexible office space
Article Date: Oct 01 2004You want a new office. You could buy or you could rent an empty one and furnish it yourself. Alternatively, you could take the route that more and more businesses are taking; renting out flexible space that provides more than a place to work.
Bearing in mind that office costs can take up much of your business expenditure, flexible office rental can offer one way to keep these costs down. And the demand for such space is on the rise – Property Week estimates that there are close to a thousand providers of flexible and serviced offices across the UK.
Substance over style
‘Flexible office space ranges from the all-singing, all-dancing serviced offices at the top of the scale to conventional ones with a minimum of services provided. And obviously, the cost varies accordingly,’ says Diana James, marketing manager at Workspace Group, which offers offices, studios, workshops and storage space in London and the South East.
The comprehensive option will include fully furnished premises, in multi-tenanted buildings, with receptionists to meet and greet your clients and even answer the phone in your company name if desired. They are fully equipped with the latest technology such as broadband and telephone and fax systems. Access to meeting rooms and kitchens are all part of the package.
Hana Plsek, business development executive at Argyll Business Services, points out that at the highest point of the spectrum, you can have an office ‘in a Grade One or Two listed building in a salubrious neighbourhood with spectacular views over the city’. However, this option does not come cheap and will set you back between £1,000 and £1,500 a month for each workstation.
Although, adds Plsek, ‘if you’re looking for a bargain, you could always go for an office on a lower floor where the views are not so spectacular.’
Moving made easier
Not least amongst the benefits that flexible leasing offers is the ability to move in or out at short notice. With leases ranging from one month to a year, there are no lengthy lease times that need to be negotiated and there is often the option to move somewhere else within the building if the needs of the business change.
According to Plsek, ‘the bigger the office required, the longer you may have to wait. If you want a 15-person office you should allow at least a month, but a four-person office can be found more or less straight away.’ Once an office has been found, ‘it’s entirely possible to move in within 48 hours of signing on the dotted line,’ she avers.
One of the other benefits is that you can meet, share ideas and communicate with like-minded businesses. For example, at Workspace’s Leathermarket premises (which are mostly occupied by small and growing businesses), there is a communal café and even a pub that is part of the site itself. As James explains: ‘We work hard to create a community spirit.’
Weighing the costs
As for the cost, James says it is hard to give accurate figures as offices supply different services and so are priced on their own merits. However, she estimates that a fully serviced office can cost around £450 a workstation. This will generally include rent, business rates, service charges, heating, power, water rates, communal area, meeting rooms, furniture, phone, network cabling and other fixed costs.
For somewhere like the Leathermarket, which has some facilities managed for tenants, but by no means all, the rate is between £18 and £21 a square foot. For the most basic office space, where the only service is a local on-call property manager to deal with problems, you are looking at around £8.50 a square foot.
Case Study — Property perks
Robbie Swales is a man who appreciates a good working environment. As one of three founders of drama-based training provider Steps Drama, the company was first run, in 1992, out of the canteen of Guy’s hospital, London.
As the business took off, Steps (so-called because the actors used to meet on the steps of Guy’s) then moved into its first rented office, a 60 sq ft space in Borough High Street. After a 586 per cent growth in turnover in five years, the business is now housed in a 1,800 sq ft space in the trendy Leathermarket area of south London. And Steps is on the move again, to premises around half as big again in the same complex.
The flexibility to move around is one of the reasons why Swales chooses renting over buying. ‘The more commitments you make, the more time you take away from the business,’ he believes. ‘With three months’ notice, we can just up and go to cope with expansion, or, heaven forbid, shrinkage.’
Swales believes there are other perks too, not least amongst them the knowledge that you are moving into an office that is ready to use, the opportunity to use overflow space on occasions and the ability to hire out extra conference rooms at very short notice when required.
Another major plus is the cost. ‘We don’t want to tie up vast sums of money in bricks and mortar, taking away cashflow from the business. Renting takes only one or two per cent of our turnover,’ he explains.
