Selecting the right office space for your business is an integral part of your property search. Occupying the right type of office space can provide your business with a foundation to achieve its objectives.
As more businesses shift to new ways of working, such as agile and hybrid models, there is value in taking time to assess the options available to you. Whether you’re a start-up taking your first office or a large organisation seeking a new location, several factors will determine which type of space is right for you.
From serviced space to leased office space, the different workplace options will also vary in cost, lease length, flexibility and location. With so many things to consider, we have compared the available options to help make it easier to decide which type of space is right for your business.
Planning a new office space relies on several different factors and will be influenced by a combination of things.
The most important things to decide on when choosing your office space are:
• Amount of space
• Working style
When you have determined these things, it will allow you to decide on your building, which is the next integral step in finding the right type of space for your business. Understanding your business requirements will inform what space is best for you.
The different types of office space are serviced, managed and leased office space. These are the main space options that businesses should be aware of when they are looking for their next office.
A serviced office space is an all-inclusive office that is fully equipped and managed by an office ‘provider’, who rents individual offices, floors or desks to other companies and individuals. Serviced office spaces come in various sizes which will influence costs. Each space will have a variety of amenities and support different working patterns so it is important to find the right property for your business.
A managed office is a tailored workspace solution that is procured and managed by a third-party supplier. They take care of everything: from finding the right building, signing the lease, designing and fitting out the space according to your business needs and procuring furniture, utilities etc.
A leased office, which is also sometimes called a traditional office, is let to a business for an agreed time. Leases in London can range between 3 and 10 years depending on the building. The tenant is responsible for managing and maintaining the facilities including the office fit out, although some landlords will offer fit out services for tenants.
A serviced office space is ideal for start-ups, small businesses and scale-ups – such as companies who foresee a change in their future and therefore require flexibility in the length of the contract term.
In recent years, coworking offices have become one of the most popular workspaces and this is a type of serviced office space. Serviced office providers like Fora and Knotel have created spaces that capture the collaborative potential of a community of workers which makes it ideal for entrepreneurs and freelancers to network and collaborate with similar businesses.
You pay per desk per month. This allows start-ups and scaleups to avoid committing to long contracts and payments during uncertain times.
The most common contract for a serviced office space is 12 months, with a three-month notice period but most providers are willing to be flexible. Coworking contracts initially start with a three-month commitment period, that will change to a rolling monthly notice.
Flexibility: A serviced office space has the shortest contract time. This flexibility is ideal for a business looking to remain agile and work in a space that can expand or reduce at short notice.
Lower Costs: Serviced offices provide a flexible, pay-as-you-go approach to meeting spaces, so your business only pays for the facilities that they use.
Added Benefits: Serviced offices offer many amenities ranging from staffed receptions and security to services related to maintenance and cleaning, meaning there are plenty of options offered at an all-in-one price.
Collaborative and Networking Potential: As companies share the workspace, the potential for collaboration is at the heart of any coworking office space.
Limited Brand Identity: A serviced workspace does not typically allow companies to brand the space as their own. Although some flexible workspace providers make some exceptions on this, especially if a member has a private office, the amount of branding that a company is allowed tends to be minimal.
Limited Privacy: Many coworking serviced office spaces require a business to share the space with other companies. This means that other people could be privy to sensitive and confidential information.
A managed office workplace provides the agility and cost-effectiveness of a serviced office with the added benefit of control and security of a traditional lease. We delivered a Cat A+ fit out at Rathbone Place for Royal London to give them a new contemporary space.
All costs, fit out and rent, are bundled into one single monthly fee, this offers businesses greater control of their cash flow. The most common contract for a managed office space is 24 months but some providers would accept a 12-month contract.
Security & Privacy: Having a managed space gives you full control over privacy and security issues including who accesses the space and how your network and IT infrastructure are set up.
Bespoke Set-up: Managed offices are fully built and fit out according to your specific business needs. This exclusivity means that you can design the space as you please. This has a positive impact on company culture and aids in how staff, competitors, business partners and clients perceive the company.
Tailored Office Design: In a managed office you will have a say in the number of executive offices, meeting rooms and breakout spaces incorporated into the office design. Thus, you have a tailored office that suits your business and your employees’ working patterns.
Cost: Over a few years, a managed office space may end up being more expensive than a lease, as you pay for the flexibility, management of the office and the bespoke fit out.
Time: In contrast to a serviced office where you simply show up and start working, a managed office requires a tenant to allow enough time for the office to be fitted.
Due to the long-term commitments, leased office space is best suited to established businesses that want bespoke space and have enough capital to commit to a minimum of a three-year lease. The majority of our clients take this type of space and recent leased office projects we have completed include DP World and Walkers.
You will pay per square foot per annum, business rates and landlord service charges for the building maintenance. Typically leased office space will have a contract term length of three years minimum. Other costs to be aware of include dilapidations, stamp duty, legal fees and building surveys.
Greater Control: Moving into a space you can call your own removes the need to share centralised resources with our businesses. It will also enable you to control who can access the building, meeting room usage, private and communal areas and IT infrastructure.
Branding: With a leased office, you can build a picture of the business through branding. This will help employees build a connection to the business and will also help steer the look and feel of the space.
Business Identity: Taking your own office space is a key step in business growth and having somewhere to call your own is an asset. A leased office space offers businesses greater control over how the space is used and what it looks like.
Contractual Penalties: Fixed lease lengths can have little wiggle room, which has proved an issue in recent years with the COVID-19 pandemic and subsequent changes in working habits.
Deal Finalisation: It can take several months to negotiate and complete the lease, with tenants unable to extract themselves from long lease contracts.
Selecting the right space for your business will support your company’s business goals, whether that’s growth ambition, increased headcount or fostering company culture. With employees now expecting greater flexibility and the emergence of working trends such as hybrid working, there are plenty of options to be considered.
Office space will still play an integral role within business strategy but it should respond to the needs of your people rather than be treated as an off-the-shelf product. On top of the financial commitments behind taking different types of office space, it is also important to look at the amount of office space you will require, as well as the location of your office space and the local amenities that will help attract people to your business.
The Guide to Finding the Right Office Space
If you’re in the process of looking for a new office space or simply want to know more about getting more out of your current space, our Guide to Finding the Right Office Space will help navigate challenges commonly associated with an office move.download now