the workspace peopleFinding the Perfect Office Space for Your Business
When you’re looking for rented office space and premises for you and your team, finding the right workspace and location can be time-consuming and overwhelming! Navigating the world of the commercial real estate market can be incredibly daunting, as you need to weigh up and balance many factors and require careful consideration of factors like location, size, amenities, and cost.
Alongside the ongoing market uncertainty, especially in the wake of COVID-19, deciding what office unit to rent or office space to rent can be very complex.
Something to also keep in mind is the growing trend that is challenging traditional office leases: serviced offices. While both serviced and leased offices offer unique benefits, determining the best fit for your business involves careful evaluation. Do you know which one is the best choice for you?
This article gives a detailed overview that helps us explore the options and the tools that the real estate industry provides that we can use to our advantage and leverage them to make an informed decision.
Let's dive into the world of office space and find the ideal workspace to drive your business forward!
What is a Leased Office?
A leased office is the traditional, and typical long-term rental of a professional business space or office on rent directly from a landlord. The typical way of finding an office space for rent near you, it involves renting a business space directly from the building owner and typically a long-term commitment that can range from 5 to 10 years. This has changed recently though, and a positive shift has been occurring, where in the current market landlords are willing and open to a discussion with shorter term lengths.
When looking for a private office for rent, a leased office allows you full control over the space, including a tailored layout and your choice of furnishings. However, it has a significant upfront cost for investment for the furniture, decoration and layout. Leaseholders (that’s you!) are also responsible for utilities and maintenance, cleaning and other expenses required to keep the office in top shape and to maintain a professional workspace.
What is a Serviced Office?
A serviced office is a fully furnished, flexible workspace with included amenities and services. A serviced office space is essentially a quick set-up flexible workspace. Renting one for you and your employees can be useful, as they come without the headache of setting up an office. Fully equipped and ready for immediate use they eliminate the incredibly time-consuming process of setting up the office and allow you and your employees to get to work immediately. Unlike leased offices they can be on flexible terms, meaning shorter agreements. Alongside an actual physical space, they also provide building maintenance, cleaning and reception services that are provided by the office itself. Additionally, utilities like electricity, heating, and high-speed internet are generally included in the rental price! This simplifies the process of office space renting and allows you to hire space and work as soon as possible. Many serviced offices also provide enticing amenities to appeal to your team such as gyms, exercise classes, showers, artesian coffee, bike parks, communal areas and rooftop bars.
Is a Serviced Office or Leased Office Best For Your Business?:
Let's summarise for you to compare:
Flexibility vs commitment: Serviced offices offer flexibility, short-term agreements and the ability to scale up or down quickly. Leased office spaces, on the other hand, offer long-term stability and the autonomy to customise the office, whether the long-term commitment is a pro or con is your call!
Pricing structure: While serviced offices may seem more expensive initially, this is because they include the utilities, maintenance, and cleaning up front. This saves you money in the long run. Leased spaces require upfront costs like deposits, agent fees and legal fees, plus the costs of having additional employees to handle building admin & maintenance.
Timing & resource: Serviced offices are immediately available when rented, which allows you and your team to move in quickly. Leased spaces can be a headache to find, and then you have to negotiate, and customise it for what you need. Leased offices can take up to a year to secure.
Since the COVID-19 pandemic, office space rental has become even more complex.
Since COVID-19, the rising costs and uncertain economic conditions have forced companies to reassess their workplace needs. This has meant that leased offices with long-term stability that lack flexibility have given a boost to serviced offices with their adaptability and shorter contracts. Ultimately the choice you make for your business depends on your specific needs, your growth plans and whether you need to rent a flexible office space or not.
How much does it cost to rent a business office space in the UK?
The short answer is: it depends. Both serviced and leased offices come with an initial cost to rent, but the specifics (and what they include) can vary significantly!
The Upfront Costs
Serviced offices: Generally require a lower upfront investment, and you'll typically pay a deposit equivalent to one or two months’ rent, with VAT.
Leased offices: These demand a more substantial upfront commitment. Alongside a significant deposit, you'll also face agent fees, stamp duty land tax, potential site survey costs, and of course legal fees.
What is the average cost to rent office space?
Once rented, the cost of renting office space in the UK is influenced by numerous factors, including:
Location: Office space in prime city centre locations like London, and certain boroughs of London, will typically have a higher price than an office in smaller cities.
Size of Space: The square footage of the office, and the layout significantly affects the rental cost.
Lease Length: Longer can come with lower monthly rates, and while shorter, the more flexible terms may be pricier.
Renting an Office Space in London
The cost of renting professional office space in London varies greatly and it is essential to understand the different options available to you. As with any real estate, location is a major cost effecter. Prime areas will cost the highest rent, whereas less central zones can offer more affordable options.
Renting in a key area of London
Renting in prime areas of London is when the cost starts to rise. Places such as Mayfair and Knightsbridge plus key business hubs close to major train stations such as Kings Cross, Liverpool Street, Victoria, Paddington and the City of London, the costs for Serviced and Leased Offices rise considerably due to the popularity of the areas.
Due to it being a key, popular and prime location with its proximity to the financial district, the City of London has the highest prices. Per desk, it can cost from £545 to £915 per month, and potentially higher when certain amenities are required.
Compared to Liverpool Street and The City of London, Kings Cross is more affordable! Ranging from around £360 to £1200 per desk a month, the area is full of new companies in the tech sector.
Making an Informed Decision
Before committing to any office space, you should consider your budget, business needs, and growth plans. Compare quotes from multiple providers and explore whether a serviced office space or a lease office space is better for you.
Factor in all potential costs. Remember, the cheapest option isn't always the best! Consider the value and benefits each space offers to ensure it aligns with what you and your team need.
Save a lot of time and money by speaking to the experts. Office search companies such as Flexioffices offer free expert advice. These experts will know the market, prime locations for your industry, can offer office viewings and will help you negotiate the best possible deal on terms that suit your business. Having an experienced company working for you throughout the whole process eliminates the hassle of finding the perfect office solution for your business and team.
