Nearly a decade ago, researchers studied how and why people thrive at work. The data showed that employees who belong to a serviced office space report levels of thriving at an average of 6 on a scale of 1 to 7, which is an entire point higher than for those who work in a traditional office.
Perhaps that's why a whopping 3.1 million people are currently utilizing flexible office spaces around the globe — a figure that's projected to grow by 5 million in the next several years.
In this detailed guide, you'll discover everything you need to know about the innovative and flourishing world of serviced offices — from insider lingo to top operators and pandemic protocols. Whether you're an independent contractor or the CEO of a big company, you’ll learn how you can leverage serviced offices to increase productivity, create community, and save costs.
A serviced office is an all-inclusive leased space that professionals and companies rent on shorter-term all-inclusive rolling contracts. The short-term lease lets the tenant grow or downsize as needed, without having to wait for the traditional multi-year lease to expire. As a tenant you still get everything you might expect from a professional office space including security, cleaning, maintenance, and even parking.
Today’s serviced offices come in a variety of sizes, from a single dedicated room to a full building. Businesses of all sizes and types can find serviced office space with not just desks and chairs but also reception services, IT infrastructure, and meeting facilities.
Serviced Offices have been in operation in the U.K. for decades with industry pros crediting the Fegen Suites, created by attorney and real estate executive Paul Fegen, as the first serviced office space in 1966. But the OmniOffices Group, an early predecessor of industry leader Regus, was already on the scene in 1962. It wasn't until the dot.com boom in 1989 that Regus, launched by English entrepreneur Mark Dixon, that serviced offices started to become more commonplace.
Though the industry suffered through a number of ups and downs in the 90's it wasn't until a few decades later that today's current boom took hold driven by the likes of WeWork and other coworking operators. Between 2017 and 2018, the number of flexible offices centres in the U.K. reached 5,320, marking almost 10% growth. Europe has only 5,858 coworking spaces on the continent, but the vast majority are housed in the U.K. Currently, there are 147 operators in London alone with WeWork accounting for 27% of all available flexible office space.
Though Covid has had a largely negative impact on the serviced office market due to social distancing, according to Knight Frank's 2020 Covid-19 London Serviced Office Market report, flexible space still accounts for approximately 6% of all available office stock in London and with many companies starting to plan for a return to the office, serviced office operators like Landmark Offices, Mindspace, Uncommon and others that have survived are well placed to play a vital role in providing flexible, short-term solutions post pandemic.
If you're considering joining a serviced office workspace, you'll do well to become fluent in flexible office-speak. Here’s a selection of common terms and what they mean:
Hot-desking refers to a workspace system in which desks are rotated among people on an ad hoc basis. Hot desks can be implemented in coworking setups as well as private offices.
Because hot desks don’t provide any sense of permanence, there’s less and less demand for this one-time trend. As a result, most coworking operators have significantly cut down on the number of hot desks available to rent.
A dedicated desk is a membership option that provides a workspace just for you. It provides a more permanent setup and more privacy compared to hot-desking or using shared spaces only. You can also curate the space and leave your supplies right where you left them.
A managed office is a vacant space that’s rented out by a landlord or property owner. It doesn’t typically come with furnishings, business opportunities, reception services, or other amenities.
A flexible, or "flex" space refers to any space that’s offered to businesses that can tailor it according to their needs.
The rent for a serviced office typically includes furnishings, utilities, building maintenance, and other necessities that you would pay for out-of-pocket with a traditional lease. When you add up the cost of those other necessities, serviced offices usually cost less in the short-term.
Whether it’s meeting rooms you only use once a day or desks for future hires, Serviced Offices offer flexibility to grow your office space as your business grows and only pay for what you need.
Serviced offices usually come ready to go and can be tailored to meet your needs. In most cases, the only item on a new tenant’s to-do list is to choose the office layout. Everything else — conference rooms, lounge and kitchen areas, and more — are already there. The settle-in process is quicker, so tenants can start working faster.
This is a big draw for many tenants to serviced offices rather than traditional leased space. Many facility management groups have lease minimums as short as three months. On average a 12-month term will get the best lease rate in a Serviced Office and is still much shorter compared to the three-year minimum more common in traditional office leases. The shorter lease term means that a business can grow faster or downsize as needed without having to wait for a lease to expire.
Serviced office tenants often have the chance to rent more or less space in the same building. Instead of having to change their business address and move all of their stuff, the company just has to sign a different rental agreement. Along with simple and shorter legal agreements, the overhead to move is much lower than traditional leasing.
Further reading: The Top 10 Benefits of a Serviced Office
When Regus began, it was largely geared toward entrepreneurs, freelancers, and startups. In many ways, the industry still caters to these kinds of businesses, but it has also expanded to incorporate companies of all sizes.
Serviced offices are utilised by all of the following:
Serviced offices or working from home (WFH): Which is better? It's a fair question, especially in a post-pandemic age.
Obviously, a WFH setup is entirely free (at least for the business). It also provides a certain level of convenience — cutting out commuting time, for example. The benefits are pretty scarce beyond that, however, and there are significant downsides.
For one, it makes achieving a work-life balance nearly impossible. Many freelancers and WFH professionals also experience high levels of boredom and loneliness, which can quickly begin negatively impacting your mental health and overall well-being. It also makes your motivation plummet.
Serviced office space makes up for where working from home fails. As we mentioned above, productivity is one of the chief benefits of coworking arrangements. Being around people and in a professional environment increases your levels of productivity and happiness.
Some companies are also opting to enhance WFH by adding a serviced office that allows their employees to work closer to home, whether it's for a few hours or days each week. This is a great option for those who are still on the fence.
The cost to rent a serviced office can vary by location, type of building, amount of space and amenities provided. The median cost to rent a person office ranges from £193.00 in Lambeth to £820.00 in Westminster with the median price across the UK at £353.00.
The median cost to rent a serviced office for 5 people in London is £2,905 per month while the median price for a 10 person office in London is £7,050. But depending on your budget and desired location, the price can vary from £6,000 per month to upwards to £12,000.
To help you budget for your next office we've analysed the data and put together a number of useful price guides for you:
COVID-19 wreaked havoc on numerous industries and businesses, and serviced offices have been forced to evolve in its wake. Shutdown restrictions varied greatly by country and county, but once businesses began reopening, operators faced the novel challenges head-on developing their own Covid-19 safety standards like Cleanstart implemented by UK's Landmark Offices.
While these businesses faced dwindling memberships as employers and employees alike realised they could do all their work from home and save on commercial costs, the demand for coworking by larger corporations is now on the rise.
However, the safety of this setup is a concern for members and interested prospects alike — and rightly so. All the big operators have taken significant steps to decrease risk. The New York-based behemoth WeWork, for example, has taken the following measures:
With these measures and more in place, serviced offices have never been safer, and some of the changes might be here to stay. Look into the spaces near you to find out exactly how they’re putting safety first during this unprecedented time.
Today, there are extensive options when it comes to coworking spaces, including:
There are various factors to consider when choosing the right coworking space for you.
The most important component is the location — you'll not only want to find a space that's easy to commute to, but one that's also near shops, restaurants, and other businesses.
Next, you'll want to think about what kind of workspace is best suited to your needs, and what kinds of resources you want access to. And don't forget amenities. Ask yourself: What perks do I want with my membership?
Last but not least, you must consider cost. As mentioned earlier, there’s a range of membership plans available, each at a different cost.
Once you've narrowed down your list of coworking spaces, go ahead and schedule a time to tour the space. Get a feel for the environment (taking note of things like natural light and noise levels), sense of community, and quality of the materials.
These factors should play into your decision:
Whether it's Mindspace vs The Office Group, the Labs UK vs Orega Serviced Offices or Landmark vs Clockwise your options for serviced offices are vast, when it comes to choosing the right space for your business.
Showing page 1 of 6
The world is changing, and work is changing with it. From saving money to encouraging creativity and employee health, more flexible workspaces are a simple solution to many modern work trends. Read more
Finance, insurance and other large corporates are increasingly using serviced offices to open new markets and provide office space closer to where their employees live. Read more
Sharing office space isn't as big of a job as you may think! With our 5 step guide, we discuss some easy ways on how you can transform your office in a coworking space. Read more
Showing page 1 of 6