The Real Estate Encyclopedia
Serviced offices_ Industry Review
Category - Real Estate Information Sources - Real Estate Articles

The serviced office sector has seen its share of good times and bad. During the stock market bubble at the turn of the millennium, serviced office companies were able to charge five times the market price of office space to up-and-coming companies who needed to setup and grow quickly.

However, the market felt the full force of the dot.com crash, which was closely followed by 9/11, both of which stopped the industry pretty much dead in its tracks.

Not long after that, the US branch of Regus and HQ Global Workspaces - the two largest serviced office companies - were both filing for Chapter 11 bankruptcy protection.

However, the market is now seeing a resurgence. So why this happening? Well, surprisingly, uncertainty is the ideal breeding ground for the serviced market. Unlike property ownership - which is somewhat like a marriage, short term leases are the perfect solution for those companies who are afraid of commitment.

With many organisations in holding patterns, unable to secure investment and waiting for the economy to de-stagnate, services solutions are the perfect place to hold fire.

However, the serviced concept wasn't designed for companies who are unable to grow. On the contrary; it was designed for businesses that are ready to grow and again, the current climate is perfect for this. With the tech startup scene in London starting to gain some real momentum, there are a torrent of companies who need a slick scalable office. More importantly, they need the right postcode. For young startups, image plays a big role in success or failure, as organisations vie for the attention of clients and investors. It is here where serviced offices really come into their own in terms of offering value for money.

There are not many startups who could afford to buy or even lease a property in Silicon Roundabout, but that is where a tech company really needs to be to get noticed by the right people.

Serviced offices can save companies of the right size money too. While they can be more expensive over the long term, businesses can get economies of scale on overheads such as photocopying, administration, right down to cleaning and toilet roll.

London is not the only place where serviced offices are enjoying success. Cities such as Bristol, Birmingham, Manchester, Newcastle, Edinburgh, Cambridge, Leeds and Sheffield all have offerings for organisations that want the convenience of a serviced solution, but do not need to be wired into London. In fact, for certain industries, they might find the cities to be better suited to their needs.

Cambridge, for example, is not only the home of the university, but is the home of chip developer ARM as well as some of the finest Research & Development companies on the planet. Sheffield has world leading medical research begin carried out, while Bristol is home to many progressive organisations.

Serviced offices are not for all organisations by any means; however, businesses of the right size, in the right place and at the right time, might find them the perfect solution.

About the author: This article is written by Nancy Peterson, she started her career as marketing analyst and has worked for many companies for last few years. Nancy has started sharing her experience with her readers and has written many articles on offices to rent mayfair.

 
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