A Definitive Guide to Serviced Offices in London

What is a Serviced Office?
Who Uses Serviced Offices?
The Key Benefits
Common Features
Rental Options
Choosing the Right Location
Costs
Frequently Asked Questions
Serviced Office Locations

The serviced office industry is one of the fasted growing sectors in the European property market. Since the global recession, many businesses opt to use them because of their cost efficiency, flexibility and practicality.

Statistics from the Department of Business Innovation, state that there are over 800,000 businesses in London alone; more than any other region in the UK. Finding a conventional office space can be difficult, especially for new and emerging businesses that don’t have the budget to support such ventures.

Serviced offices provide a solution to this problem, allowing businesses of any size to establish their presence in the capital.

What is a Serviced Office

What is a Serviced Office?

A serviced office – also known as a managed flexible office space – provides a total office solution that’s ready to use. Operators take on the responsibility of maintaining the building and may also provide additional services and facilities. This gives you the freedom to come and go in a short space of time and makes them accessible even if you have budgetary constraints.

The primary difference between serviced offices and conventional offices is the way they are used. A lease for a serviced office is usually short term and may only last for a few months; however, long-term leases, which are usually associated with conventional office spaces, can last for years. Serviced offices provide a much greater sense of flexibility because you can quickly and easily change your premises depending on your business requirements.

Serviced offices can be configured to suit your own personal needs and can significantly vary in size – from a single desk to an entire building. If you manage a large-scale business, you can even adjoin offices to accommodate larger amounts of staff. They may also contain shared amenities with other rented offices. This allows you to have access to an infrastructure that you may not have otherwise been able to afford.

Who uses Serviced Offices

Companies with a global reach will often use serviced offices to get set up in other countries. If you own a business abroad, a serviced office may be a more cost efficient and manageable option if you’re trying to set up a new branch in London.

Who Uses Serviced Offices

Serviced offices are suitable for a vast array of organizations. Don’t make the mistake of assuming they are purely designed for small businesses. In today’s market that couldn’t be further from the truth.

Large Businesses

It can be difficult for even large-scale businesses to predict profit margins, so committing to a long-term lease agreement is not always a viable option. Large companies will often use serviced offices as a short-term office solution so they don’t have to pay out excessive overheads.

Small to Mid-Sized Businesses

Small to mid-sized businesses regularly use serviced offices to give them the same resources, facilities and opportunities as their more “upscale” competitors.

Home Based Business

Home based businesses often rent serviced offices as the first step in their property strategy. Again, this provides the facilities for expansion without resulting in excessive costs.

Global Businesses

Global companies that want to expand and set up London offices may use a serviced office to get their business off the ground in a short space of time. Likewise, businesses from outside of London in other parts of the UK will often test the waters by setting up a branch in the capital.

Temporary Workspace

Using a serviced office as a temporary workspace means that the flow of business continues uninterrupted if another property isn’t accessible. For example, if renovations are in progress.

Serviced offices are ideal if you aren’t sure about the future of your business and how much capital you can put aside for an office space.

·       Are you unsure about your company’s growth rates?

·       Do you need a temporary work space while you relocate your business?

·       Are you finding it difficult to manage your current premises?

·       Do you want a prestigious working address in central London?

·       Are you unable to afford a conventional office space or commit to a long-term contract?

If the answer to any one of these questions is “yes,” then a serviced office may be just what you need.

The Key Benefits

Committing to a long term lease or mortgage is always risky; especially you manage a new to mid-sized business. Due to their flexibility, serviced offices can reduce this risk without hindering your professionalism.

Short Term Agreements

Large-scale companies that have a long term lease agreement, but are looking to expand, will often use serviced offices to “test the waters.”

New and upcoming businesses may also take the same approach in order to see if they are ready for a more permanent office solution when they are more financially stable.

Long-Term Agreements

Fledgling businesses that don’t have a track record will often be asked by landlords for a large down payment and deposit, which can lead to increased borrowing. Not to mention the initial capital that’s required to customize the space, purchase furniture and install Internet and telephone wiring.

Prestigious Address

It’s no secret that image is one of the most important aspects of business. Having an address located in the centre of London can not only enhance your professional reputation, but can provide better networking opportunities.

The benefits of Serviced Offices

Business Growth

Having to organize premises, communications departments, and general management can take up a great deal of time, effort and money. These services are usually provided with serviced offices, allowing you to focus your efforts on business growth.

Simple Contracts

Lease documents can not only be difficult to understand, but can result in further expenditure in legal consultation. Serviced offices are designed with simplicity in mind. This is reflected in their license agreements, which are usually no longer than one page. Everything is written in plain English and avoids unnecessary clauses that may be present in a conventional lease agreement.

Think about the money you will have to spend if you hire a solicitor to comb through a 75 page conventional lease agreement. These costs will add up, especially if negotiations and changes need to be made.

Flexibility

Accurately predicting profit margins is difficult, so committing to a lease agreement for a conventional office may result in long term financial issues. Serviced offices can be available for anything between one month and one year; and usually have renewable agreements. This means they can provide a temporary working environment without interrupting the flow of business.

Growth Flexibility

It can be difficult to accommodate growth if you have limited office space. Serviced offices give you the opportunity to adapt the size of your premises and staff requirements according to your company’s growth.

Payment Flexibility

If you rent a conventional office space you will be expected to pay rent quarterly in advance. Many serviced offices require payment on a monthly basis, which can free up your cash flow. Most of the extra amenities and services are usually charged on a “pay as you use” basis, which can result in significant savings and reduced upfront costs.

On-Site Services

Many serviced offices will have a body of staff ready to keep your workspace up and running. This can save time, money and hassle, as you don’t have to go through the gruelling process of hiring staff to conduct mundane duties, such as cleaning, security, customer service, maintenance and secretarial support.

Serviced Offices - On site services

High-Tech Equipment

Purchasing office equipment will take a massive dent out of your finances. From telecommunications to kitchen facilities; high-tech equipment is usually provided by serviced offices, allowing you to bypass purchasing and have access to equipment that would have otherwise been out-of-reach.

Networking Opportunities

Networking is one of the most important elements of “good business.” Having other companies residing in the same building can encourage cross-communication. This is especially beneficial if you run a small to mid-sized business and are still trying to make your mark in the industry.

Administration Efficiency

Operators will provide a single consolidated invoice on a monthly basis. This will include both the cost of rent and any additional services and facilities that you have used throughout the month. This can save your accounting department a huge amount of time and effort.

Pay-Per-Use Facilities

Having the option to use conference rooms, meeting rooms, kitchen facilities, etc. can be hugely beneficial. If you don’t require these facilities on a permanent basis, you can save a huge amount of money in rental fees.

Common Features

Most serviced offices will share the same common features. Having facilities provided and ready for use can save time and lead to substantial savings.

Meeting Rooms

Meeting rooms and conference rooms are usually available on a “pay-as-you-use” basis. Different billing options and costs can vary according to the building and operator.

Serviced Offices - Meeting Rooms

Telephone and Internet

Telephone and Internet is usually covered in the rent. Operators who charge rental fees will often provide these services at a reduced rate. Some agreements may cap telephone and Internet services; and if your business exceeds the capped amount, then you will have to cover the costs. Operators may also include a specific allocation of local and national calls in your monthly fee.

Furniture

Chairs, tables, workstations and filing systems are often a significant upfront cost; however, serviced offices are fully fitted with furniture that’s set up and ready to use.

Computers

Most serviced offices don’t provide computers; however, this can also vary according to the location and operator.

Business Services

Business services may also be provided on a pay-as-you-use basis. This could include: reception staff, telephone answering services, customer service teams, courier services, stationary supplies, secretarial services and travel services.

Catering

Some serviced offices may also provide tailored catering. This could be anything from ensuring your fridge is stocked up to scheduling lunch deliveries.

Serviced Offices - Catering

Rental Options

Unlike conventional office spaces, serviced offices are usually licensed rather than leased. This is a simpler form of agreement that allows you to bypass expensive solicitor fees. Agreements are designed to reflect the simplicity of moving into an office space and won’t contain legal jargon that’s difficult to understand.

Office Space

Serviced offices either charge a flat fee for a desk, or a fee per-square-foot. If you run a small business or are moving into your first office space, renting desks may be more suitable; while if you have a large amount of staff, renting per-square-foot may be more cost efficient.

Services and Facilities

The services and facilities that are provided will be clearly written up in your license agreement with their terms of use. The rules and regulations can vary depending on the operator and your specific requirements.

Choosing the Right Location

Location can make or break your business and finding somewhere suitable to get set up is never easy. Certain areas of London are more suitable for certain industries than others. Finding the right hub to set up camp could boost your image, impress clients and generate more networking opportunities. Before you start searching for your new office space, you must decide what location will be most suitable for your business from a practical point-of-view.

London has the largest number of serviced offices in the world, accounting for 8% in total. This is the equivalent to the combined market share of Paris, Tokyo, New York, Hong Kong and Sydney. The London market is the most established in the world, which has resulted in greater accessibility to the city.

Transport Connections

Being close to transit systems is paramount, especially if you plan on conducting business with people who don’t live in the London area. Canary Wharf contains both a DLR and a tube station (Jubilee Line), making it easy to commute in and out of the more central areas of the city. It is also within close proximity of London City Airport and has plenty of underground parking spaces. King’s Cross is also an excellent location if you have European connections because the rail station is a major London terminus that services the Eurostar.

Image

If you place your company image as one of the most important factors in standing out over your competitors, then a prestigious London address in Knightsbridge or Mayfair can help. However, a serviced office in these locations doesn’t come cheap. The expensive areas of London are often more suitable to businesses that already have financial stability, rather than start-ups.

Scope

If you expect your business to expand in the future you’ll need more space. It’s always a good idea to pick an office that can accommodate expansion so you can stay in one place. Always make sure you find out how much flexibility you’ll have. In some serviced offices expansion could be as easy as opening a few doors or taking down a wall or two.

Serviced Offices offer lots of scope for businesses

Facilities

Although most serviced offices will contain the same facilities, such as desks, furniture, Internet, etc., you should figure out exactly what you’ll require in advance. For example, if you need a conference room once per month to meet and greet clients, make sure the option is available and that they have the right sized board room or meeting room on-site.

Conference Facilities available at Serviced Offices

Leisure Facilities

If you want access to leisure facilities, such as a gym, swimming pool and squash court, either choose an office space that provides them within the building or find a location that has nearby facilities within walking distance.

Industry

Each part of London is split up into its own industry categories. Having your business located in an area that’s associated with your business will do wonders for your company profile. For example, the Old Street and Shoreditch area have the nickname “Tech City,” due to its 5,000+ web businesses. If you own a tech based company, then being in this area will certainly look great on your business card.

The Influence of the Working Environment

Never underestimate how much the working environment can effect employee satisfaction. According to The Work Foundation, a bad working environment influences up to 51% of employees to leave their jobs; in addition, 85% of employees state their working environment inhibits their creativity. Having a serviced office located in a central London location with access to amenities and transport connections can boost employee satisfaction, which could significantly increase profits.

Costs

Studies conducted by the UK Chartered Institute of Purchasing state that businesses will often reduce costs by up to 78% when they use a serviced office.

The costs of serviced offices may look high in comparison to a conventional office space; however, there are usually no additional expenses, such as heating/air conditioning, electricity, security and maintenance.

The costs of additional facilities in a serviced office are minimal and can significantly vary depending on the operator and location. In most circumstance you will only ever be charged as and when you use them.

Rental fees can significantly vary depending on the square footage of the office space or by how many desks you require.

Desk Hire

If you run a small business with limited staff a desk may be more appropriate for your needs.  In London, the lower end of the scale starts at around £350 per month; however, in the suburbs prices can get as low as £200 per month. The most expensive areas, such as Mayfair usually cost around £1000 per month.

Desk hire at Serviced Offices

Facilities and Services

Although the rent cost will cover all of the basic facilities, other services will often be provided at an additional cost. This is usually billed by the hour, half-day or full-day. These additional services and facilities usually include:

·       Video conferencing

·       Meeting rooms

·       Conference rooms

·       Printing and copying

·       IT support

·       Customer support

·       Concierge

·       Transport

·       Stationary

·       Admin support

If you want to use extra facilities and services you will usually have to book a time in advance and then pay for the time on the next billing date. Some operators will also provide other special services, even if they aren’t advertised.

One of the primary benefits of using serviced office facilities is that they are often a fraction of the price of an off-site facility, such as a hotel conference room. This can result in even more savings.

Frequently Asked Questions

Q: How quickly can I start using a serviced office?

Serviced offices are designed for immediate occupation. Once you sign the agreement you could be set up within the hour.

Q: What are the benefits of choosing a serviced office in London over other parts of the UK?

London is a global hub for commerce and far exceeds any other location in the UK in terms of business opportunities.

Q: What if my business expands and I need more space?

Most serviced office buildings will have the facilities to accommodate expansion, allowing you to upgrade your premises whenever you see fit.

Q: What if I want to downsize and use less space?

You can choose to downsize at any time if you need to free up your cash flow.

Q: How much can I customize a serviced office space?

Serviced offices must remain unbranded; however, some operators will customize the layout upon request.

Q: When can I access a serviced office space?

Most serviced offices are open 24/7, allowing you to come and go whenever you please.

Serviced Office Locations

Prices per desk can fluctuate significantly depending on location. The average price for a desk in central London is between £500 and £600 per month.

Serviced Offices - Locations in London

Mayfair

The main industries that operate in Mayfair are investment companies and hedge funds. Nearby locations include Berkeley Square and Piccadilly.

Nearest Rail Services: Green Park (Underground), Hyde Park Corner (Underground)

Walking Distance: 10 minutes (Green Park), 15 minutes (Hyde Park Corner)

Average Price: £750 per desk

Old Street

Most businesses that operate in Old Street are fresh start-ups in the tech and media sector, such as website design companies and video game developers.

Nearest Rail Services: Old Street (Underground, National Rail Services)

Walking Distance: 2 minutes

Average Price: £450-£500 per desk

Shoreditch

Shoreditch is within the “Tech City” cluster. A high number of web businesses operate in this area. Nearby locations include Farringdon/Clerkenwell.

Nearest Rail Services: Shoreditch High Street (Overground), Liverpool Street Station (Underground, National Rail Services)

Walking Distance: 10 minutes (Shoreditich High Street), 20 minutes (Liverpool Street Station)

Average Price: £450-£500 per desk

Holborn

Holborn is at the forefront of London’s legal industry and houses a vast array of law firms. Nearby locations include Chancery Lane, Fleet Street and Kingsway.

Nearest Rail Services: Holborn (Underground)

Walking Distance: 2 minutes

Average Price: £450-£550 per desk

Kings Cross/Euston

Kings Cross has a large mix of businesses. Nearby locations include St. Pancras.

Nearest Rail Services: King’s Cross Station (National Rail Services, Eurostar, Underground)

Walking Distance: 5 minutes

Average Price: £400-£550 per desk

Fitzrovia

Fitzrovia contains a high density of media and PR firms. Many of the world’s most prestigious post-production companies are also located in this area.

Nearest Rail Services: Goodge Street (Underground), Tottenham Court Road (Underground), Oxford Circus (Underground)

Walking Distance: 2 minutes (Goodge Street), 5 minutes (Tottenham Court Road), 10 minutes (Oxford Circus)

Average Price: £600 per desk

Oxford Street

Oxford Street is mainly home to media firms and is the central hub of the UK’s film industry. Nearby locations include Soho, Tottenham Court Road and Regent Street.

Nearest Rail Services: Oxford Circus (Underground), Tottenham Court Road (Underground)

Walking Distance: 2 minutes (Oxford Circus), 5 minutes (Tottenham Court Road)

Average Price: £600 per desk

Covent Garden

The Covent Garden area contains a high density of media firms, PR services, film and television production companies, and post production studios. Nearby amenities include Long Acre, which is filled with shops and restaurants.

Nearest Rail Services: Convent Garden (Underground)

Walking Distance: 2 minutes

Average Price: £600-£700 per desk

Square Mile (City of London)

Square Mile mainly contains tech-based companies and financial service institutions. Locations within this area include Bank, Liverpool Street, Moorgate, Monument and St Paul’s.

Nearest Rail Services: Bank-Monument Station (Underground, DLR), Liverpool Street Station (Underground, National Rail Services)

Walking Distance: 2-30 minutes

Average Price: £500-£700 per desk

Marylebone

Most of the businesses that operate in Marylebone revolve around the medical or hedge funds industry. Nearby locations include Baker Street, Harley Street and Great Portland Street.

Nearest Rail Services: Marylebone Station (National Rail Services, Underground), Oxford Circus (Underground), Marble Arch (Underground)

Walking Distance: 10 minutes (Marylebone Station), 10 minutes (Oxford Circus), 15 minutes (Marble Arch)

Average Price: £500-£600 per desk

Canary Wharf

Canary Wharf is a major business district in Tower Hamlets famed for its skyline. It is one of London’s two financial centres.

Nearest Rail Services: Canary Wharf (Underground, DLR)

Walking Distance: 2 minutes

Average Price: £600 per desk

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