Start-ups and entrepreneurs: The rise of serviced offices
Often the best route (or the only one) to starting your own business is working from home or your garage. The need to get bigger space and or a professional environment is soon a necessity when the business takes off and expansion is required. However a level of flexibility is required and the commitment to a long lease may not be the right step or one that can be affordable.
Therefore one option, initially, is by use of a serviced office. Several researches have shown this to be the case, with London leading the way. London has always been a magnet for start-up business and entrepreneurs seeking space and funding. The take up of serviced offices in the capital has shown a strong incline compared with previous years, with the West End leading the way.
Serviced offices offer the flexibility new start-ups need in order to grow and to have a presence in the commercial world. With demands ever changing, these offices are becoming a fast, simple solution to which landlords need to be more aware of.
The steep increase can be attributed to several factors. The advance in technology and communication is clearly a factor. The need to work from one location is now simply not as rigid a requirement that it was. Another factor is often the operational overheads and staffing costs of the small to medium enterprises (SMEs), who cannot then make the commitment to a traditional 10-year lease. They are therefore attracted by the flexibility of a short-term lease, the amenities and lower cost of a serviced office.
The appeal of a co-working environment is another contributing factor. Office sharing, which works well in a serviced office environment, is often a convenient way to develop a networking circle. Sharing the same offices as other like companies such as tech companies and start-ups, provide a pool of information.
The rise in commercial rents within London may have also had an effect on serviced office take-up. Committing to a 10-year lease with high rents is not for the faint hearted. The fixed cost for occupying a serviced office is a key attraction for occupiers as they are able to add certainty to business costs.
Demand for serviced offices will remain constant and is a useful tool to any SME or start up. The lease presented will often be a simple form and the legal costs involved are low as well. However, they are as subject to the changing rental market as any business. As we see rents gain strength each year, there is the possibility that too much upward pressure on rents could cause problems for serviced office providers.
If you would like any more information in relation to this article then please feel free to contact me via email: tony.chauhan@bowlinglaw.co.uk or visit my profile.
