While the serviced office is not a new idea what we are seeing is an acceleration in demand across all business sectors and from various businesses at different stages in their growth cycles from start-ups to SMEs and on to major corporate occupiers. The trends driving this demand are largely linked to the increasing recognition amongst businesses that they need to create workplaces that allow them to compete for the best talent in the market place. The very best co-working spaces create environments for collaborative, creative and innovative workplaces and creating such a workspace increases a business's chances of retaining and engaging with a young and increasingly mobile workforce. Not only is there a recognition of some of the softer benefits from co-working and serviced offices there is also an increasing recognition that modern workforces want flexibility from their office locations and this means not being held to the terms of long and potentially onerous lease terms.
So if a service office or co-working space is on your agenda what are the pros and cons of each that you need to be aware of:-
1. Cheap in comparative terms
Compared to renting a traditional office the financial outlay can be flexed to meet the occupier's requirements at any point. Daily and hourly rates are even available, making it much more flexible than traditional leases and even serviced office spaces which will generally be in a fixed-term contract.
Rather than committing to a long term letting arrangement, short term arrangements are much more common. There may also be spaces as small as a single desk available which particularly suits the likes of start-ups, freelancers and entrepreneurs.
Frequently there will be a combination of multiple desks and private areas to work from. With many co-working spaces designed to have a focus on social working, everyone shares the communal space which provides the opportunity to nurture a shared culture and connection.
1. Lack of privacy
It's difficult to work on confidential business or to ensure complete privacy for project teams.
2. No design input
If you let your own space then you have the flexibility to design and build your own working environment. Co-working spaces, however, do not allow for you to have any input or control.
Private meeting rooms and break out areas can be hard to claim between those sharing the space.
Furnishings, infrastructure and amenities are all already available with reception, support staff and maintenance being just some of the amenities offered by many serviced office spaces. There are also a lot of spaces available in prime business area locations.
Most contracts have a fairly short notice period, allowing you to move on within a couple of months. You can also take on as much or as little space as you need at any given time.
3. Transparent costs
The deals are generally all inclusive so include rent, utilities and other services. Serviced accommodation also generally has no or low start-up costs, in contrast to a traditional lease.
Generally each business will reside in their own office. Staff will generally only interact with others in their businesses and the opportunity to mix with others in the building will be limited.
2. Expensive in the longer term
While comparatively cheap in the short to medium term, the monthly costs can be more expensive than a traditional lease in the longer term.
Some serviced accommodation is branded making it obvious to clients that the business is operating from a shared business centre, as opposed to having your own office space which can be tailored to incorporate your own brand.
Clearly every business will have its own unique requirements based on its own individual circumstances and also where it is in terms of its own growth projections. However, serviced office spaces and co-working has been continuing to rise in popularity since they first appeared on the market a little over a decade ago. So while they should certainly be considered when deciding to move into a new office space, offering a lot of advantages over traditional leases, they may not be the right fit for every business as there are drawbacks to consider. Nevertheless, shared working spaces may well be the future of office leases for many businesses.