UK Serviced Office Market: Growth and Drivers
18th February 2016
The UK’s serviced office market is flourishing. As the call for bigger and better offices escalates across the country’s largest cities, surging demand continues to outstrip restricted supply.
In recent years this has fuelled double digit growth, specifically in London, where the serviced office industry has grown by a staggering 67% in the last 10 years, now accounting for 25% of the sector. This momentum has now spread to the UK’s other major cities, with Northampton, Bristol, Aberdeen, and Glasgow all reporting in excess of 15% growth in the number of centres between 2013 and 2014.
So what is fuelling this exponential rise, and will it last?
Growth of SMEs fuelling demand
In 2015 there were a record 5.4 million businesses in the UK, with small or medium sized enterprises accounting for 99 per cent of them. As growth companies and start-ups proliferate, technologies advance, and the face of corporate UK changes, so too must our workplaces.
The flexibility and diversity of the serviced office model is at the forefront of these developments, offering start-ups and early stage entrepreneurs more than just a simple desk solution. Their advanced facilities and central locations are far greater than what an SME might typically afford. Moreover, serviced offices can provide an ideal working environment for UK businesses as they can cater to the evolving needs of SMEs as they grow and mature.
With 70% of serviced office space occupied by small or medium sized businesses, the rise in growth companies and their changing workplace needs present a great opportunity to serviced office providers, as the recent stellar growth in the market illustrates.
Shift toward flexible working
Deloitte’s 2016 Millennial Survey reveals that our emerging workforce is looking for organisations that not only promote innovative thinking and encourage creativity, but also facilitate flexible working, with 43% wanting to work from home or other locations where they felt most productive.
As technology advances and British office culture moves away from the traditional 9am – 5pm working week, it has never been easier for companies and their employees to work remotely. Access to breakout spaces and onsite cafes and bars in addition to the traditional workstation and meeting rooms are commonplace in many serviced offices, and can complement this shift in workplace dynamic. Moreover, the serviced office model of paying per workstation can prove to be more cost-efficient, as well as helping to retain talent, boost productivity and enhance job satisfaction by enabling employees to work in a way that suits their lifestyle.
From London to the localities
London may be where these new ways of working first caught hold, but they are now spreading out into the regions, and fuelling the growth of serviced offices nationally. The towns and cities most likely to benefit are those that have seen strong growth in SMEs, tech, information and communication businesses, which have the greatest need for flexibility. This includes Bristol and Cambridge, both home to clusters of tech-focused growth businesses, and northern cities such as Manchester, which is billing itself as a home for SMEs and benefiting from the Government’s drive to create a business and tech powerhouse in the North.
The themes outlined above are not temporary trends, but very real shifts in Britain’s working culture. As employers and employees embrace more agile, flexible office space, the record growth of the serviced office industry looks set to continue.
If you are interested in viewing serviced offices please call Gryphon Property Partners on 0203 440 9800 or click on the following link - SERVICED OFFICES