#cre #officespace #flexibleworkspace #office #workspace
When people are looking for office space, it is generally because;
It is a new business looking for premises
The business is growing and a home office is no longer suitable
Dissatisfaction with the current office for whatever reason
The decision on the right office space for you/the business/staff can be quite an overwhelming exercise. You will have an array of options open to you – area to base the business, city centre location (or not), multi tenanted (or not), size requirement – for now or the future (who can confidently predict that one?), staff needed (or not), technology needed/available for data/telecoms, leased or serviced……..
The range of options and how they are presented could leave you feeling uninspired and struggling to understand contracts, leaseholds, sqm costings, hidden costs, legalities, responsibilities etc etc.
If you know what you want before you start, it will help you navigate the world of office space but also save you time (time is money) and save you stress trying to work it all out.
Essentially there are 2 distinct categories – Serviced and Un-serviced. So what are they and what are the differences?
Un-serviced (Leased) – renting an office or building from the landlord on a £ per square foot/metre per annum. These usually require signing a contract of 3 to 10 years. You then take control/responsibility for the building and operations within.
Serviced – an office within a building which is equipped and managed by the office provider. Pricing is by the office and so linked to the size required. Taken on a licence basis with short term commitments of 3, 6 or 12 months. Usually including facilities such as reception, meeting rooms, kitchens/wc’s, cleaning and maintenance services. Other variable services are available too, depending on what the provider offers.
+ ‘s and -‘s (pro’s & cons)
|Serviced office||Leased office|
|Low set up costs||Apart from within your own office, limited self-branding||Long lease – predicts requirement over longer term||Finalising a contract takes a long time including legal fees|
|Short term commitments||A lot of similar style, bland offices||Guarantee of a set business base for x years||Capital expenditure at lease end for reinstatement (dilapidations etc)|
|Totally flexible – to upsize or downsize||Monthly prices can appear high||Full control over branding of the space||Accurate profit forecast is needed for a long commitment|
|Fully furnished||Limitations to negotiate rent in return for long commitment||Control over the design and layout of the space||Costly to furnish|
|Infrastructure in place including data and telecoms||Able to decide on the technology required||Infrastructure and technology costs are significant|
|Plug in and go||Potential ability to negotiate rent reductions based on long commitment||Substantial deposit required|
|Hassle free – no management of utilities, cleaning, visitors, required||Freedom to evolve and diversify the space||Staff required for managing the property and reception as well as the business|
|Simple fixed monthly charge, no extra or unexpected bills – aiding cash flow||Responsible for ongoing costs such as service charges, business rates, utilities, health & safety requirements, cleaning and maintenance|
|Reception (and often Receptionist) to meet and greet visitors
|Meeting rooms and breakout areas provided|
|Ability to network with other businesses|
|Up and running interesting and bustling business environment|
|Access to onsite support services, such as IT, Accountancy, Administrative, Reprographic|
|Property Management included|
The cost of office space varies depending on the area of the country, the quality of the space and the amenities. Costs can be broken down into £ per sq foot, size of office or number of workstations.
Comparing cost per square foot – leased offices will be slightly cheaper than serviced offices. However, these costs do not include many of the hidden costs associated with conventional office space.
Apart from the huge set up costs of furnishings, fit out, and IT & telephony infrastructure, leased offices can have high monthly bills – the utilities such as electricity, gas, water, business rates, Wifi, phone lines, are all extras. Legal fees for a solicitor and commercial agent will also be applicable.
A serviced office will appear more expensive on the surface, just because most of the associated costs are factored in. Remember that aside from the deposit, there are no upfront costs.
Not only do serviced offices usually work out to be the cheapest option, they also offer so much more than just office space.
Therefore many businesses in serviced offices really benefit from the ability to work alongside and network with many others. This often brings about a collaborative style of working, encouraging networking and business partnerships.
Not convinced? Come and see for yourselves – DBS Managed Offices in the East Midlands.
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