London’s serviced office space is in demand
Demand for serviced office space in London is growing at a rapid rate, according to a new report from Deloitte Real Estate.
Their Business Footprint study suggests that the market has grown by 67% in the last ten years, showing that many firms are placing greater emphasis on serviced office space.
Around five million square feet of services offices can now be found across Central London, with 34% of it found in the City.
That particular area has noted growth of 21% in the last decade while the West End has also seen considerable growth – up by 28% in the last ten years.
Docklands and E1 meanwhile do not have similar levels of serviced space in terms of size, but have seen increases of 350% and 230% respectively in the same time period.
Competition among serviced office providers has also increased in recent years, as the number of operators has jumped by a quarter.
Despite this, 75% of all service office space in the capital is managed by the top ten leading operators.
Many firms that are expanding are looking for new office space but they must carefully weigh up the benefits of moving to ensure they are getting good value.
Some locations are considerably more expensive than others and could put great pressures on company finances in the long-term if a move does not bring the desired results.
The needs of many companies are changing on a regular basis so keeping costs down is seen as an essential piece of business management.
Not only should it boost the longevity of the firm but it should also prevent unnecessary pressures being placed on the cash flow, especially in instances where unexpected expenditure is required for any reason.
While business rescue procedures can help to manage such situations, the report also suggests that many serviced office operators are evolving their approaches to suit the needs of businesses.
The report recognises that many firms will have different approaches and working practices and that there is a requirement to cater for as many needs as possible.
Given the high numbers of firms choosing to operate out of the capital, it is expected that demand for serviced office space will continue to grow, as will the costs of such space.
By Phil Smith