The drive of employees returning to the city for full-time or hybrid work has seen a growing demand for serviced office space in London. As businesses leave pandemic-era policies behind, market data shows that demand for these flexible workspaces has grown by 22% in 2022.
Yet, these more flexible and new ways of working carry a string of benefits and drawbacks, raising the question “is this rapid shift from conventional working space suitable for your business?”.
What is a conventional office?
A conventional office is any office space that is leased for a long period of time directly from the owner of the building, usually at a price per square foot per year. Conventional offices are also known as leasehold offices and are typically the first choice for businesses that require long-term office space.
They're a popular option among companies willing to commit to long 5+ year lease terms and who want to have the freedom to decide on the layout and equipment of their workspace, without having to commit to buying a property.
What is a serviced office?
Often known as flexible workspaces, the term serviced offices can mean a variety of things, but at Ethical Property our office space comes included with services such as facilities a business needs to operate as well as maintenance. . Typically, a company, small business or individual pays a monthly cost for the space, with the price being calculated on an all-inclusive basis, based on square footage or number of desks.
These sorts of office-as-a-service solutions suit new businesses growing quickly, or start-ups looking for short to medium term contracts, who can move in and out of offices with flexibility.
The typical facilities offered alongside include modern layouts and desk space, telephone lines, high-speed internet access, comfortable meeting rooms and a fully equipped kitchen.
Benefits of a conventional office
Conventional office space best suits businesses that are already established and have sufficient capital to set up the space. They're a popular option among companies willing to commit to a longer rental period and who want to have the freedom to decide on the layout and equipment of their workspace, without having to commit to buying a property.
It allows for more control over management and maintenance of all facilities, for example, arranging space planning and fit out, I.T. and telephone systems, furniture, cleaning, utility bills and service charges. When carefully managed, costs per desk tend to usually be lower than comparable serviced office space.
Unusual for serviced working spaces, at Ethical Property, our tenants are able to fully customise the layout of their working space (providing it's structurally sound and agreed with Ethical Property) and fit out. This includes building internal meeting rooms and putting up walls and furnishing (at tenants’ expense).
Conventional office space also leaves greater scope to showcase company image through brand signage inside and outside of the building. Ethical Property tenants are welcome to decorate the inside of their offices so that it matches their brand as well. They just have to return it to the original state at the end of their lease when moving out. The only difference is that the outside of building is out of bounds for customisation as Ethical Property focuses on management of the overall signage and promotion of tenants inside.
Additionally, because of their longer-term nature, lease contracts for conventional office space mean that you don't need to spend time negotiating and looking for suitable office space every time the contract ends. As an exception to the rule, despite being classed as a serviced workspace provider, Ethical Property too has really flexible leases – offering the best of both worlds. Some of our tenants have been with us for more than 10 years, and we will be happy to offer you a long-term solution to suit your needs.
Cons of a conventional office
When leasing an office, you are responsible for maintenance and upkeep, so this may not be the most cost-effective solution if you prefer an all-inclusive model.
Conventional office spaces also have several drawbacks that can hinder the growth and productivity of a business. Businesses are required to commit to long-term leases, which may not allow for the flexibility needed to adapt to changing business needs.
For example, if a business needs to expand or downsize, it may be difficult to do so without breaking the lease or incurring extra costs. This lack of adaptability can be a significant hindrance for businesses that need to be agile and responsive to changing market conditions.
Benefits of serviced offices
Unlike conventional offices, managed offices are available immediately, with reception services, IT support and building management all included in one monthly payment. You can turn up, plug in their IT equipment and be ready to operate in a matter of hours.
They provide a much less stressful and less time-consuming office space solution. You have the flexibility to occupy the space you require at the time you need it with the option of expanding or reducing their office size.
Benefits of a serviced office also include greater agility to grow, expand, and adapt to market conditions. These workspaces have flexible terms and provide all necessary amenities, including bespoke solutions and collaborative spaces. Therefore, you have opportunities to grow without incurring massive overheads. And if there is a downturn, it is easy to adapt to smaller spaces.
Smaller businesses tend to benefit from the communal space within shared office spaces, as it makes it easier to collaborate, network and share ideas. Through modern coworking providers, companies are therefore able to build a unique community or knowledge hub.
Finally, lots of modern serviced offices or coworking spaces offer attractive perks, such as on-site coffee shops or break out areas, hi-tech meeting rooms, on-site gyms and bike storage. Office admin, such as recycling and cleaning, is often offered as part of the service.
At EP, our centres benefit from well designed and practical facilities, and the presence of like-minded organisations and individuals – providing partnership and networking opportunities, and a strong a sense of community and shared purpose.
Cons of serviced offices
Occupiers of serviced offices may struggle with the lack of flexibility regarding their office setup. For example, tenants may not get to choose furniture or interior designs to match the look and feel of their brand identity. However, at Ethical Property our tenants are welcome to decorate the inside of their offices how they like so that it matches their brand and only need to return the office to its original state when moving out.
Some serviced offices also charge extra or don’t tend to offer meeting rooms at all as part of a serviced office package, meaning firms must book well in advance which isn’t ideal for urgent, ad-hoc meetings. It isn’t the case for Ethical Property, where we offer meeting rooms as part of the package, which come equipped with Meeting Owls and Screens.
Finally, when using co-working spaces, some tenants may have concerns about the security of the shared Wi-Fi networks on site. If security is a worry for you, you can chat with our IT team who can work with you to organise your own private network or Wi-Fi.
As demand for office space quickly returns to the pre-pandemic level, organisations are facing the decision of choosing to continue with a more traditional space offered from a conventional office or opting for a more flexible, serviced office space to suit their changing needs.
The huge demand in the serviced office space market is driven by one factor – flexibility for their employees who are desiring greater latitude regarding the amount of time spent in the office. In addition, businesses must cut costs without impacting productivity and innovation. Therefore, serviced offices that encourage a collaborative environment are seen as the way forward by many.
On the other hand, a business may prefer the more accustomed alternative of a conventional office that is more suitable for promoting the brand image of the business and offers a more bespoke approach to setting up their working space.
At Ethical Property, you truly get the best of both worlds, as we offer the convenience and agility of a serviced working space yet we also offer design flexibilities and the benefits of a longer term leases as with a conventional office
If you’re looking for new serviced and flexible office space, get in touch with us at sales@ethicalproperty.co.uk, call us on 0330 016 3440, or visit www.ethicalproperty.co.uk/contact-us.