With the bulk of office lettings being below the 5,000 sq ft size, serviced office space has enjoyed a boom in demand over the past few years, writes Patrick Matheson.
There has been a healthy level of office lettings by way of the traditional lease so far this year but noticeably there have also been a great deal of activity in the specialised sector of managed space. This is where space can be committed to for very short periods, usually just three months.
The appeal to occupiers is that the short-term commitment, often on a licence agreement and an all-inclusive cost basis, means maximum flexibility either to take the space for the initial three months and no further or to extend the agreement, by taking less or more space as business circumstances dictate.
This often low-cost and flexible arrangement has had great appeal during the recent recession.
Many companies have grown used to the essential control over the space needed either by expanding or contracting. As a result managed space is not just used by start-up enterprises but by well-established companies.
Typically Gosforth’s Regent Centre, once billed as Europe’s largest office complex, has seen an unparalleled level of activity with space under offer or through to completion. This must be a reflection of the improving sentiment in the economy as well as the strength of the location. As a result the good mix of requirements has meant the scheme’s The Grainger Suite is in its fourth phase of expansion.
When opened more than 30 years ago, The Grainger Suite was a little over 3,000 sq ft but today it is rapidly heading towards the 20,000 sq ft mark. Now in its recently commenced fourth phase it is 85% occupied with the first three phases reaching 99% occupancy. This reflects how the managed concept is increasingly in demand.
In Gateshead, Yours Business Networks at Metro Riverside is another example of success in the sector. Developed by Morston Assets the existing 12,000 sq ft facility, which includes leisure facilities as well as a suite of meeting rooms and conference facilities, has attracted around 20 occupiers to date.
The continuing demand for space has allowed Morston to embark on a further phase of 4,000 sq ft which will deliver around seven new suites. The latest phase will be ready this July and some of the new space has already been reserved.
Gateshead is the UK’s largest of the Yours Business Networks brand. Located on the Metro Riverside Business Park, next to the Metrocentre, it offers a busy for businesses.
It has state-of-the-art HD video conferencing, an intelligent communications suite offering interactive SMART board and other audio visual equipment, allowing businesses that want to work closely with national and international markets without having to leave the office.
Serviced business space is an important part of the regional office sector, broadening the options available to occupiers.
Patrick Matheson, partner, office agency, Knight Frank
Office occupiers have had the benefit of access to serviced offices and managed business space across the region over the past two decades, writes Tony Wordsworth.
Initially the office space was created on easy in/easy out flexible lease terms which proved advantageous to new and expanding smaller companies who could grow within business centres and benefit from shared facilities and on site management.
Often this space was carved out from existing vacant buildings such as Churchill House or by subdivision of larger vacant floor plates including Regus in Rotterdam House and the City Executive Centres within Cuthbert House, Newcastle.
The concept has also moved “out of town” to major office parks as is evidenced by Regus at Doxford Park, Sunderland and Team Valley as well as the CBX – Cobalt Business Exchange at Cobalt Park, North Tyneside. The 120, 000 sq ft CBX has been developed within the former Siemens/Atmel building adjacent to the A19 offering a range of fully fitted office suites which has secured a high level of occupancy.
More recently at Gateway West Business Centre, Newburn Riverside Business Space Solutions have extended their business centre to approximately 15,000 sq ft which was launched in February 2012. The operator reports continuing strong interest from companies wishing to occupy the serviced offices.
The offer available in terms of serviced offices and business centres, available on flexible terms, can play a big part in the economic regeneration of the region as well as speedily accommodating changes of space requirements and employee numbers across the region.
GVA believe that the implementation of flexible working within offices and remote working will accelerate rapidly over the next decade. Organisations will increasingly adopt a broad mix of out of office working, serviced offices and traditional leased/owned property.
However, the issue of legacy property will be a barrier to such change but flexibility of occupation – shorter leases, serviced offices, managed offices, out sourcing, office-hotels and such – will become more prevalent.
Tony Wordsworth, director, national markets and offices, GVA