Pop up offices – a threat or opportunity?

 

A great deal has been said about pop up shops but what about pop up offices? Sometimes known as ‘meanwhile offices’

In the RICS magazine ‘Modus’ it was commented that landlords have already adopted a more innovative approach to secure lettings. Just as the retail sector has seen a rise of pop up shops, landlords are introducing pop up offices, with shorter leases, more frequent break options, flexible rents and inducements to bring in tenants in previously unfashionable areas.

This is not true flexibility as the serviced office sector knows it but it is a move towards it.

The recent study conducted by the University of Reading on behalf of MWB Business Exchange showed that in London there is 15.6m sq ft of available property of which 3.67m is being brought to the market by companies whose core business is not real estate. It is property probably held on a lease but not used.

This represents about 23.5% of available stock and it could be assumed that other cities have a similar percentage.

This could be prime property for pop up offices.

How will the Serviced Office sector respond?

Do you see this as a threat or an opportunity?

 

Your views would be appreciated.

About the business centre specialist

Tom Stokes is the UK's leading specialist in the development and management of Business Centres, Managed Workspace and Serviced Offices. A Fellow of the Royal Institution of Chartered Surveyors (FRICS), with nearly 40 years experience in property and the majority of that experience in the flexible space market, he comes with a wealth of experience. Quite simply, there is nothing in this sector which he has not experienced. In 2000, he set up Evans Easyspace, retiring from the company at Easter 2011. He built up the company from scratch to having 58 business centres throughout the UK and was the leading provider of new, quality small offices, workshops and self storage units which were let on genuine easy in, easy out terms. The Evans Easyspace brand is highly respected and the company is also one of the most efficient in the sector. He is a firm believer that small businesses want flexibility and that is what he can advise on and deliver in a way which will help your business grow. He is also a past Chair of the Business Centre Association (bca), having joined the Board in 2003. He is a life member of the bca and still advises the bca on certain issues.
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1 Response to Pop up offices – a threat or opportunity?

  1. It is true that over the last few years, landlords have offered increasingly ‘flexible’ deals. I use quotes because, as you point out, it is not true flexibility, just cheaper rents, with long rent-free’s, shorter terms and easier get-out clauses.

    We also have incidents of landlords seeming to turn to a fully serviced model simply because they cannot sell a conventional lease. Here in Bristol, we have in excess of 2m sq ft of vacant secondary office space. Much is being converted to hotels and residential.

    I think landlords have looked at ways to respond to markets until things pick up again. However, I believe they are missing the point.

    With the increase of flexible work practices by large companies and more agile workers looking for a different solution, the overall need for office space is not going to recover to pre-2008 levels.

    Even the serviced office model will not be immune to this trend. So the threat is not so much more flexible leases, but social and workplace changes combined with technology advances that are affecting the way we work.

    What happens to all that property?

    Students in particular are fueling the need for accommodation and there seems to be no end to the number of hotels wanting to open in Bristol. I can see four buildings from my window that are applying/have applied for approval for change of use.

    However, we do – apparently – need more premium space, so we could see a raft of buildings refurbished to BREEAM criteria to fill this gap – one has already started.

    Watch this space…

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