The Rise and Rise of the Serviced Office

The serviced office industry is thriving. With 5m sq ft of serviced space across the city and increases in market share as large as 21% in the City, it seems that occupiers are starting to see flexible office space as a viable alternative to conventional leasing. One of the top leasing deals of last quarter featured one such provider, with We Work taking 167,912 sq ft at Moor Place. But competition is fierce, with the likes of Regus and Workspace also featuring within London’s top 50 Office Occupiers.

So what’s driving this success?

To find out, the EGi research team visited one provider at its quirky offices at 46 New Broad Street. A Monopoly inspired art-deco building recently refurbished by Peldon Rose and home to Office Space in Town. 

The theme for the space arose from a similar project carried out in the firm’s Waterloo office, which was designed to feature elements from Lewis Carroll’s Alice in Wonderland. Amelia Woolley, General Manager of Office Space in Town, claimed that the move to incorporate pop culture into design was part and parcel of an attempt to make their offices feel less corporate and more comfortable to suit a culture that’s spending more and more of its time in the office. A vintage Monopoly feel complements both the building (refurbished with remnants of an art deco past) and the occupiers; the professionals and legal based clients one would expect from the city core. 

38% of the New Broad Street building is used as break-out space, featuring a roof terrace and Monopoly signage and character pieces scattered throughout its 4th floor (complete with giant silver dog and bowler hat lamps). Wooley believes the communal space helps to enhance the occupier’s experience through encouraging collaboration, no doubt aided by the building’s roof terrace and plug and play connectivity we’ve come to expect from the serviced office. 

When asked what impact the sector has had on London occupiers, both Woolley and those at Peldon Rose highlighted the increasing desire for the kind of malleability and personalisation that the average short term lease doesn't particularly cater for. “We tailor the offices to suit the location and caliber of occupiers we expect to house” says Amelia. “As with any other office, location is key.” Clearly, such a move is paying off as demand is healthy. “A lot of our occupiers end up staying longer than intended and we’re now in a position where we can hold out on the last room until the right occupier comes along.”

So what’s made the serviced office sector so strong? 

The answer, as with most things, comes down to both time and money. Fixed lease terms and ever increasing rental prices (driven by shrinking supply) just don’t provide the flexibility that a lot of occupiers need. Serviced space  allows them a place to turn to in periods of transition or growth, without necessarily leaving the area. But the occupiers themselves are also changing; the rise of FinTech and the TMT industry have led to a reshuffling of priorities, with flexibility and autonomy becoming more important. Serviced offices work with these desires in mind, providing opportunities for hot-desking and ad-hoc space, as well as more conventional overflow.

Whatever the reason, it seems that serviced office space has become a refreshing alternative to the traditional office format, allowing both occupiers and landlords more autonomy in their working environment.