Here is the Loc8 Commercial serviced office sector round-up for 2015 and a look ahead at what we can expect in 2016 across the UK.

Here is the Loc8 Commercial serviced office sector round-up for 2015 and a look ahead at what we can expect in 2016 across the UK.

2015 Round-up:

With total office take up over 7 million square feet in the City in 2015, the serviced office sector has lead the way with over 10% of the total according to the latest report from Savills, published at the end of the year.

With 2015 completing a three year period of office growth across the City it was the serviced office operators that set the biggest record. They accounted for more than 1.9m sq ft of the total office space over 2014 and 2015 which compares to a total of around 1.5m sq ft between 2005 and 2013.

Office take up was dominated by four strong sectors. Professional services accounted for 19% of the total space taken followed by Insurance and Financial services at around 17% and the TMT sector at 12%. One of the surprising changes has been the 9% take up by the Banking sector after a few years of low performance.

Of the planned office space scheduled to open in 2016 more than half (54%) is within the area known as the City Core, which covers EC2, EC3 and half of all the EC4 postcodes in the City of London. With Carter Jonas predicting further growth in commercial property investments in Central London of 8.8% in 2016 this anticipated new space may not be around for very long, especially as 2015 ended with healthy occupancy levels in London of almost 96% (Savills December 2015).

The planned new building called the Undershaft
The planned new building called the Undershaft

With the latest plans submitted in December for what will be the City of London’s tallest tower, the Undershaft due to open in 2019, it’s important to note that a total of 5.2m sq ft of new and refurbished space will open in 2016 which is set to fall short of the expected demand.

The scramble for take-up of the expected space is set to mirror 2015 and continue the growth seen since 2013 and will see occupancy rates return to pre-recession levels. The serviced office sector in particular, will continue to experience the increases seen in 2015 helping to cement the sectors growth back to pre down-turn levels last seen prior to 2008. And this strong growth will continue to be driven by the Central London market with growth over 10% in 2015 set to continue. Southwark led the way in 2015 at 17% whilst the Greater London area saw significant growth of around 30% last year.

Outside of the strong London market, Manchester saw the serviced office market grow by 9% with workstation rates across the city rising by some 5% year on year. Interestingly Bristol and Cambridge made up the trio with Manchester to lead the growth in England with Aberdeen, Glasgow and Edinburgh in Scotland and even Belfast showing significant increases in both the number of new serviced office centres and workstation rate increases compared to previous years.

Looking ahead:

So what’s in store in 2016 in the UK commercial property market?   Well according to the latest reports from both CBRE and Savills the record growth in the market seen since 2014 is set to continue but with significant improvements coming from the recovering local regional economies, particularly the South West and North West. Which means the good news will be continuing for serviced office providers who have grown their portfolios with new business centres and refurbishments.

Picture courtesy of DBOX for Eric Parry Architects

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2015 in summary

This is a great summary of the year 2015 published in

Business Center and Serviced Office News, Tips, and Articles | Officing Today

15 Key Moments in Flexible Workspace in 2015

NYE celebrations (picjumbo)

What a year! 2015 has been a fast-moving 12 months of furious activity in flexible workspace, with countless expansions, mergers, and outside-the-box thinking. There have been closures, challenges and departures too. But above all, 2015 has seen yet another spectacular flurry of growth and change within our industry, which has laid yet more strong foundations for 2016 and beyond. It’s time to look back and celebrate as OT counts down 15 momentous moments in 2015…

1) It was a year of mergers and acquisitions:

In 2015, Regus stole the spotlight several times having acquired Abby Executive Suites at the start of the year, followed in quick succession byLondon’s Avanta and later BusinesSuites.

2015 also saw Stark Office Suites acquire Plaza Executive Suites, Central Europe’s DBH take over Exact Business Solutions in the Czech Republic and Slovakia, and Bizspace’s sale to Värde Partners. Finally, in what marked the flexible workspace industry’s “growing maturity”, Clarendon Business Centres doubled in size with the acquisition of Reflex Managed Offices – which came at the same time as London’s Ventia Offices was sold to Christo Wiese’s Boutique Workplace Company.

2) Expansion, expansion, expansion:

In what marks further growth for the global serviced office industry, OT was inundated with stories of expansion and big moves in 2015. Prospect Business Centres opened a new location in London following £1.5million investment, The Executive Centre ventured further into India with its first serviced office in Pune, and ABCN continued its expansion in the Middle East.

Premier Business Centers set up in Miami Tower, Jay Suites launched on Madison Avenue, and Metro Offices opened its 10th location. We also heard positive news from IZA Business Centers, which continued its expansion trail in Mexico City, while Basepoint Business Centres announced a largescale expansion plan in England for the coming years.

Landmark Plc opened a new floor at its Dover Street location in London’s Mayfair, and Bulgaria’s Sterling Serviced Office Group finished the year on a high note with a stunning new business centre in Sofia.

3) Tech took center stage:

Perhaps one of the most notable advancements in the serviced office industry in 2015 was that of technology, and 2016 promises to bring much more in the way of time-saving automation than ever before. Leading the field is essensys, which has taken automation to new heights with its award-winning platform JEFF. According to CEO Mark Furness, the platform is set to introduce yet more new streamlined abilities to the sector in 2016 and beyond.

With Internet proving to be more important than location, good technology is essential for the continuing prosperity of the global serviced office and coworking industry. So it’s encouraging to see more bright ideas and innovation from acclaimed suppliers such as WUN Systems, which are reforming and reinvigorating workspace technology.

4) Office furniture and desks got ‘smart’:

Adaptable furniture that’s as flexible as your workspace might not be mainstream, but leading suppliers and designers like Schiavello, Turnstone and Steelcase are delivering innovative, intelligent solutions to furnish the office of the future. We hope to see more intelligent office furniture designs – including smart desks – in 2016.

5) The industry kept on growing:

All this innovation, smart technology, partnerships and acquisitions led to fast-paced growth within the serviced office and coworking industry. Instant Offices crunched the numbers and recorded impressive expansion within the UK market, as did Deloitte, which found that London’s serviced office market alone has swelled by 67% in the past decade.

There are many other growth indicators too, including this one from Urban Station – a coworking brand that’s doing great things in Latin America. After six short years, Urban Station has strengthened its leadership position in the Latin American coworking market and now plans to continue its expansion in the USA and Canada.

6) Conventional landlords joined the party:

New market entrants are another indicator of growth, and we’ve seen plenty of conventional workspace operators attracting corporate clients with new, flexible contracts and short lease terms. JLL’s HiRise is one example, although they’re not the only corporate giant to blast into the flexible workspace sector.

7) And then there was WeWork.

If there’s one name that’s guaranteed to get tongues wagging, it’s WeWork. The high-value workspace junior has shouldered its way into the flexible workspace industry with impressive gusto, making plenty of noise in the process (but not always in a good way). From questions over its sustainability and concerns over whether beer and startups is really a good mix, WeWork’s rocketing valuation just keeps rising. The headlines are impressive, but the paperwork a little less so – amid concerns over “wildly” forecasted workstation revenues and under-estimated lease expenses.

8) Flexible workspace went on holiday:

2015 saw a surge in the ‘digital nomad’ trend, spearheaded by forward-thinking coworking operators like Outsite and Surf Office. Thanks to the ever-increasing reach of wireless Internet access, flexible workspace is taking off in exciting and exotic new locations, from the rice paddies of Bali to the shores of remote Atlantic islands. All the signs point to a continuing ‘coworkation’ trend in 2016.

9) There was outside the box thinking:

Whoever thought of pop-up coworking at a three-day equestrian event? Clarendon Business Centres did, and it was a great success. Other operators who’ve been experimenting with flexible workspace include Citibase, with their semi-private workspace ‘pods’, and Regus’s strategy to win over the new generation of workers. We also saw Servcorp step away from its habitual corporate colours with a cool graffiti sprayed mural at its new London coworking venue, while UBC, Circle Offices, and Stockholm’s City Office have all been pushing the boundaries of flexible workspace with creative new ideas.

10) And lots of events:

2015 saw ABCN take to the stage at its Strategic Summit in Washington D.C., and a host of coworking events including a thought-provokingSocial Workplace Conference organised by coworking evangelist Jean-Yves Huwart, who says that the social workplace will eventually “become the standard work environment for all of us.”

We also heard the latest from DeskMag’s resurrected Global Coworking Survey, announced during the Coworking Europe Conference in Milán, and the entertaining story behind GCUC China, held in Shanghai, which became the world’s biggest coworking conference overnight.

11) There were success stories:

In 2015, as Business Environment celebrated its 21st anniversary, we heard about their slightly unconventional beginnings which eventually led to the creation of one of the UK’s most successful serviced office companies.

More success stories come from The Hub in Singapore, part of the global Impact Hub network, which raised an impressive $1.1 million (S$1.5 million) in a “series A” funding round; Landmark Plc’s record client satisfaction levels; and Metro Offices, which has been named among the Top 25 Women-Owned Businesses in the Washington, D.C. area for the third year in a row.

12) There were more female-only workspaces:

Continuing the theme of women-owned businesses, 2015 saw the launch of more gender-specific workspaces including The Ventura – Australia’s first co-working space designed specifically for female entrepreneurs. While some argue that exclusive workspaces – be they specific to gender or sector – may cause more harm than good, many of these spaces continue to flourish, which suggests that they play a vital role for its users.

13) There was a lot of giving (and not just at Christmas):

Scores of serviced office and coworking operators and companies all over the world spent 2015 giving back, and engaging their workspace communities to help needy causes in ways big and small.

14) …and there were well-deserved awards:

We saw many worthy award-winners this year including the fantastic and often-mentioned Kathlene Buchanan, founder and CEO of Metro Offices, who has been acknowledged for her superior efforts and leadership in the serviced office industry.

Lisa Gufford’s Executive Suite Professionals (ESP) beat off heavyweight competition to scoop the 2015 Best Business of Jacksonville Award, and in November, the BCA awarded Business Environment’s Minories location with the Business Centre of the Year Award. Other winners on the night included Will Tattersall of Instant Offices (Broker Representative of the Year), Hubcreate (Trade Supplier of the Year) and Stonebridge Offices in Leeds (Independent Business Centre of the Year).

15) And we’re still left wondering: What will the future really look like?

There are so many possible futures for our industry. From superfast construction and automated reception services to powerful independentsand operators edging into the hotel business, what opportunities does 2016 hold?

We’re already privy to some innovative office design predictions for 2016, and we certainly hope to see more sympathetic workspace design catering to individual personalities. No doubt the Internet of Things will continue to help operators create smarter, tech-savvy workspaces in 2016, aided by the industry’s leading technology suppliers.

One thing’s for sure, the future of flexible workspace is bright and we’re looking forward to another action-packed year in 2016. Keep those stories coming in and be sure to connect with OT and its reporters on Linkedin, Twitter and Facebook. Happy New Year!

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Shortage of space in the Managed Workspace Sector.

“Real demand from SMEs” but industrial developers are not responding to demand

18th November 2015

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Carter Towler managing director Ian GreenwoodCarter Towler managing director Ian Greenwood

“THE signs are positive and demand is strong,” said Ian Greenwood, the new managing director of chartered surveyors Carter Towler, but industrial supply is not up to par.

The market has evolved since Mr Greenwood joined the firm in 1989. He was there when Carter Towler was born, after Carter & Co merged with Towlers in 2008. He said: “We merged just as the market crashed. The timing looks bad but it actually worked really well. There was a lot of synergy between the businesses.”

Carter Towler did not make any redundancies during the recession, and it has only picked up from there.

Mr Greenwood said: “It was towards the end of 2013 that we started to deal with more and more businesses enquiries. The demand for space has increased since then and by 2014 the number of deals in the region took off.

Mr Greenwood said there were now “clusters of activity” all over the region and Carter Towler worked on the acquisition of John Lewis’ 50,500 sq ft warehouse and distribution hub at Logic Leeds, as well as on Poundworld’s aquisition of its new Normanton base.

“We’ve been really busy the last 18 months, letting more than 900,000 sq ft altogether, a big chunk being the Poundworld deal,” Mr Greenwood said.

“As it stands,” he continued, “the signs are positive and demand is strong. Industrial supply however is still limited. It’s a strain on the market. There are schemes coming out of the ground, but occupiers can’t always wait and may go elsewhere.

“This undersupply is not just a Yorkshire problem. There’s a consensus in other regions that speculative builds will only serve a certain market and still have risk attached, they’re usually at the bigger end as well, upwards of 100,000 sq ft.

“There are lots of businesses that need smaller sites, and schemes like Trident Park have been really successful. But as quickly as they’re built they’re snapped up. There’s a real demand from SMEs but investors and developers know they can make more selling a single unit than several smaller units, so they tend to develop in the upper size range.” Mr Greenwood said.

“On the other side of that, they’re putting all their eggs in one basket. Spreading risk with smaller units might be the way to go,” he continued.

“Developers are treading carefully in the speculative market, and they do tend to be bigger. There has also been an increased trend for property companies and funding institutions to buy into existing estates that are older and refurbishing them.”

Despite this gap in supply and demand, there is every reason why things should continue to pick up in the region.

Mr Greenwood said: “Yorkshire benefits from good transport infrastructure, and we’re at the centre of the UK, that’s why a lot of international companies and UK-based funds with international money are getting behind the Yorkshire region.”

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Five ways to make your office more energy efficient

LSI Utility Brokers

LSI Utility Brokers Blog

Improve your business’s bottom line: Five ways to make your office more energy efficient

Posted: October 26 in LSI News

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For most businesses, the biggest yearly outgoing is the cost of energy. Energy bills can create a great big dent in cash flow and profitability, and are the SME business owner’s biggest headache.

It doesn’t have to be this way. There are lots of things you can do to trim energy bills down to a manageable size, from reducing energy consumption to finding the best deals and cheapest providers on the market. Here are 5 tips to get you started, all focusing on making your office more energy efficient:

  1. Upgrade minor fittings. Not everyone has the cash to install solar panels on the roof, but most businesses can afford to replace lightbulbs with energy efficient ones and upgrade kitchen and break room equipment to new, energy efficient models. These are small changes, but they’ll add up to significant savings.
  1. Implement a ‘switch it off’ policy. Computer equipment that’s left on or on standby at night, as well as phone and tablet chargers that are left plugged in, all use energy. Educate your staff to switch everything off at night, or when not in use for hours at a time, and you’ll save a small fortune as well as reducing your company’s carbon footprint.
  1. Make minor adjustments around the office. Nudge the thermostat down a degree or two, encourage staff not to print unless they need to and put all computers equipment into their most energy efficient settings, including sleep mode – these are all small, easy changes that will make a difference to your monthly bills.
  1. Conduct an energy audit. A detailed look at energy use throughout all of your offices and buildings is likely to reveal a host of areas where improvement is needed, where lights are left on and heat is escaping. Take the time to conduct an energy audit, identifying areas where money could be saved – it will soon prove itself to be time well spent.
  1. Switch provider to get a cheaper deal. You shop around to get the best price on everything else you buy for your business, so why on earth wouldn’t you do it for your energy too? Of all the steps you can take to reduce energy costs, this is the one that will make the biggest difference to your quarterly outgoings. So many businesses stick with the same provider year after year, even if they’re spending hundreds more than they need to. The common complaint is that it’s too difficult and complicated, and there are also concerns about disruption to the business. This just isn’t the case anymore, particularly if you use a specialist business energy broker.

LSI Utility Brokers are dedicated to finding the best electricity and gas rates for businesses of all sizes. The team is vastly experienced, with a wide network of industry contacts and the purchasing power to secure deals and prices that most businesses wouldn’t have access to themselves.

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Management Agreements in Business Centres

In a report this year by Deloitte LLP on the growth of serviced offices, they stated that management agreements were to become more prevalent for operators and landlords.

Whilst their report was about the London Business Footprint, their findings can equally apply to the rest of the UK, and to other types of business centres.

Do you have a property which could become a business centre or are contemplating entering into a management agreement?  Then read on.

The report stated

‘’The occupier market is still dominated by traditional leasing and will continue to be.  However, the growth in the serviced office market and its appeal to a wide range of businesses are likely to start to alter landlords’ disinclination to lease to serviced office operators, which have sometimes been seen as risky tenants with weak covenants.  In our view, the increasing acceptance of serviced offices will result in the growth of management agreements with landlords.

‘’A management agreement will mean that the operator will not pay the landlord a set rental income, but instead will give the landlord percentage of its profit.  For the operator, this could mean access to more desirable buildings, increased flexibility to adapt to the peaks and troughs of the market as well as no fit-out costs. Despite less certainty regarding the income the building will produce, the landlord could benefit from higher revenues than fixed rental income could produce.  Our research suggests that a management agreement with a serviced office provider on a hypothetical building could produce up to twice the revenue compared with a traditional leasing model.  Whilst not yet a common practice, such agreements are starting to appear and are expected to grow as both landlords and operators increasingly understand the potential mutual benefits.’’

There are a number of operators in different parts of the UK who are interested in offering their services on management agreements.  They offer expertise in the market, established brands, marketing knowhow, management systems specific to business centres and the customer service ethos which is so important when operating with flexible agreements. In other words, they can reduce the risk in developing a business centre without you taking on the responsibility of the more intensive management which goes with it.

If you would like introductions to business centre operators who can offer management agreements or would simply like more information on management agreements, please give me a call on 07879485898 or email me at thomas.m.stokes@gmail.com

For a full range of the services I can offer, please have a look at my web site www.thebusinesscentrespecialist.co.uk

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Offices Must Work Harder

There was a comment on one of last week’s Metros that the perfect office is three miles from home and has free food, a gym. a garden and floor-to-ceiling windows, a study has revealed. However, the survey of 2000 employees found this was a far cry from the reality of most workplaces – one in ten does not even have tea and coffee facilities. The newspaper did not say who conducted the survey. However it is not far from the views I have been expressing for years – that people do not want to travel more than 5 miles from home to offices. I wonder what the survey would have shown if the sample of employees were all located within Business Centres?

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BCA Conference: Have You Considered an Exit Plan?

An essential part of any successful business strategy is to look ahead.

Your business plan may cover the next 12 months, 5 years, or even longer.

But what about YOUR future – and have you considered an exit strategy?

 

Your long-term plan might not include the sale of your business. It’s a sensitive subject, after all.

Yet on a practical level, it certainly pays to cover all bases. And it can also help you to better understand the true value of your business.

 

That’s why we’ve invited two business sales experts to BCA Conference 2015. One of them, James Caan CBE, needs little introduction.

In an entrepreneurial career spanning 30 years, James is an investment specialist who will offer guidance on the processes

involved with building up your business, and why an eventual exit strategy is not a subject to shy away, rather it should be part of your strategic business plan.

 

He’ll be joined by Paul Herman, who has spent his entire professional career advising on the sale of private companies.

Paul is the co-founder of Bluebox Business Finance, and will explain how an exit plan can shift your perspective

and even help to develop the value of your business.

 

Only you will know when the time is right. Even if a sale is not yet on your agenda, knowledge is power –

so come and feed your curiosity. Equip your business with the right tools for the future at BCA Conference 2015, and let’s make

THIS the year we take your business – and our industry – beyond extraordinary.

 

Book online hereimage002

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