Dec 12 2022
A serviced office is an office that’s equipped and managed by a third-party provider, rather than the occupiers themselves. Serviced offices are typically fully-furnished and come equipped with the basic features businesses need, like internet connectivity and desks and chairs. That makes them a popular option for ‘plug-and-play’ working, freeing occupiers from the responsibilities of traditionally-leased office tenancy.
In fact, the global serviced office market has been growing year after year, reaching a new high of $33 billion in total value in 2022. And with an annual growth rate of ~20%, the market doesn’t seem likely to go anywhere anytime soon.
That’s partly due to the benefits serviced offices offer over the alternatives (more on that later), and partly due to the unique environment businesses find themselves in (again, we’ll get to it!). In short, though, serviced offices are growing in popularity at such a fast rate because they’re the perfect solution for businesses seeking a more flexible way of working and less commitment.
They’re an ideal middle-ground between a conventional long-term private lease and a completely flexible coworking arrangement. Occupiers get the benefit of their own private office space, and near-complete control over how it looks, feels, and works. What they don’t get is the stress of fitting-out, furnishing, and maintaining their space. That’s all handled for them by the provider.
This is what makes an office ‘serviced’. The office space is transformed from being a simple product (X sqft for £X,XXX a month) to being a service. Consolidating all of the costs involved in having an office, typically including rent, utilities, business rates, internet, furniture, maintenance, insurance, and cleaning, a serviced office offers completely transparent pricing. There are no hidden costs. You pay the same amount for the office every month you’re there.
You’re also generally able to have much more control over how long you stay there than with traditional leases. Rather than being locked into a 107-20 year contract lease with a break clause after in the 4 years,5th year you’ll instead commit for a much shorter 6-24 term time and then operate on rolling basis. That flexibility is essential for agility, and agility is increasingly important in tumultuous economic conditions.
The features and facilities included in a serviced office lease vary from provider to provider and even workplace to workplace. However, they tend to include:
• Furniture (desks and chairs)
• Access to a private or shared kitchen
• Access to meeting or conference rooms
• Access to phone booths or zoom rooms
• Breakout and hangout spaces
• Internet and telecoms
• Events and networking
Refreshments including unlimited barista-quality coffee When it comes to the services included in a serviced office, things also vary across different providers and locations. Commonly included services include:
• Manned reception/concierge
• Regular office cleaning
• Office maintenance
• Rent, rates, service charge, utilities, cleaning, general maintenance
• Security 24/7 access
• Use of mailing and trading address
Select serviced offices, including many of the locations in The Boutique Workplace Company’s collection, also include features like 24-hour access, on-site showers, dog-friendly facilities, free tea and coffee, and bicycle storage.
Both serviced offices and coworking spaces belong to the new wave of workplace. They each offer an alternative to the traditional private leases that used to dominate the market, but they have some key differences separating them.
Coworking spaces typically revolve around a model of communal hot desks and reservable dedicated desks. Instead of paying for a private office space for your team, you instead book as many desks as you need. This is a highly flexible option, that gives you complete control over how much you pay for your workspace. However, it comes with the downside of having no place to truly call your own, and limited privacy.
Coworking is best suited to micro teams, entrepreneurs, remote workers, and freelancers looking for a better place to work than their home office or local coffee shop. A serviced office is a more appropriate solution for a fully-fledged business seeking a place to put down short- or medium-term roots.
Serviced offices are suitable for businesses of all sorts. They’re one of the main alternatives to consider against a traditional office lease, and have benefits that are enjoyed by everyone from solo entrepreneurs to international corporate businesses. However, the format is particularly well-suited to certain business types, including:
Fast-growing businesses: When your business is growing fast, it never feels like the right time to commit to a long-term office lease. You simply don’t know how things will change in the coming years. Serviced offices offer these businesses significantly more flexible, able to scale up or down along with their workforce to ensure they’re never paying for space they’re not using.
Businesses using a hybrid model: Businesses that have adopted hybrid working as their de-facto way of operating are a great fit for serviced offices. These businesses are typically striving for agility and flexibility, both of which are on offer in abundance from a serviced office.
Micro and small enterprises: Serviced offices are also especially well-suited to businesses on the smaller end of the scale because of the simple and transparent nature of the all-inclusive pricing model typical of serviced offices. This pricing method is much more approachable for businesses who keep tight control of their finances, compared to the price of a traditional office lease and the hidden costs associated with being a long-term tenant.
I think we should add PLC’s as satellite offices especially post-covid
We should also add small-medium sized businesses establish for X amount of years as Hilary’s researched showed Boutique’s clients are quite established. Don’t want to put off readers in them thinking that as an establised small-medium isn’t the right client for Boutique when most of our clients are. Micro and small enterprises are more for WeWork etc.
Serviced offices don’t exist for no reason. There are several core benefits which are contributing significantly to their rapid rise in popularity. These include:
Leasing a serviced office is an entirely separate proposition to leasing a traditional private office space. Shorter and much more flexible lease terms allow you to rent your office space for exactly the right amount of time, helping you to avoid getting stuck in a long-term commitment you can’t fulfil.
Bundling all of the costs involved with having an office into one simple price makes serviced offices more manageable for businesses looking to manage costs effectively. There are no unexpected expenses involved with fitting-out, furnishing, or maintaining the space.
Serviced offices are generally far more competitive when it comes to features and facilities than traditional leased offices. You can get access to high-tech meeting rooms and phone booths, on-site cafesgyms, and even manned reception services for the rental price – all adding value to the deal. Boutique workplaces are also dog friendly unlike some traditional landlords.
Particularly for businesses that are expanding into new markets or looking to get up and running quickly, the plug-and-play nature of serviced offices is a huge benefit. Coming fully-furnished and ready to work in with business-grade fibre-optic broadband, you can move in and get going on miniscule timeframes.
A challenging and uncertain economic landscape necessitates some risk management from businesses looking to survive unscathed, and serviced offices offer just that. They’re generally scalable, meaning you can increase or decrease the amount of space you have on request. This means you can reduce costs in a pinch to make it through. Uniquely, Boutique is one of the rare providers that do not require a deposit as well unlike other providers or a traditional landlord. This means no capital is tied up with Boutique.
Serviced offices are our specialty. The Boutique Collection contains 30+ workplaces across London and the rest of the UK, each one perfectly equipped to provide ambitious businesses with a place to call home.
Browse our collection of workplaces and find the office that suits you.
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