Regional Office Locations Are Taking Centre Stage
Looking back over the past year or two, we can say with some conviction that business centres around the UK are about to get a lot busier.
As a long-established operator of flexible serviced offices, here at UBC we have seen our fair share of market activity. Just a few short years ago, flexible office space was considered a niche submarket of the commercial property sector and it was treated as such. Shared workspace in the form of coworking was virtually non-existent, serviced offices were suffering an identity crisis, and business centre companies often struggled to take space in high quality buildings.
Today, it’s a different story. Serviced office and coworking companies are occupying trophy buildings across the UK, including such landmarks as The Shard in London and MediaCityUK in Salford Quays, and one flexible workspace company in particular is worth an estimated $20billion.
Talk about change! And there’s much more where that came from.
Traditionally, flexible office space was popular with small businesses and startups, but now it attracts businesses of every conceivable size and structure, from growing SMEs and government departments to FTSE 100 companies.
All these firms share a common appreciation of flexibility, which means they can occupy professional workspace without the costly or risky commitments associated with conventional leases. During the UK’s current period of political uncertainty, this is an essential component for any business.
New research from Savills released in August 2017 shows that take-up of serviced offices in the UK more than doubled in the first half of 2017 compared to the same period last year.
Their latest report shows that serviced office take-up across the UK increased by 176%, with 186% growth in Central London and “substantial growth” in regional markets, too.
In another vote of confidence for the flexible workspace sector, Savills launched its own brokerage platform for companies seeking coworking or serviced office space in the UK -- a first for the 160+ year-old company that until now has only ever handled conventional office deals.
Explaining why the firm decided to step into the flexible workspace market, Jeremy Bates, Savills’ head of occupier services, said it is “an acknowledgement that in the marketplace there is a growing demand from occupiers - from start-ups through to corporate office occupiers - for flexible workspace.”
What’s more, demand for flexible workspace is growing right across the UK, not just in London.
Regional cities taking centre stage
In its 2016 report, Instant Offices noted that occupier enquiries for flexible workspace across the UK increased year-on-year by an average of 20%. That year, all regions of the UK apart from London and the South East experienced an increase in enquiries of more than 10% compared with the previous 12 months.
As revealed during a webinar by CoStar, a data-driven research and analysis company for the commercial property industry, regional cities are performing positively with many properties and business parks experiencing their lowest office vacancy rate for several years.
Recently, Birmingham Business Park in Solihull, home of UBC’s head office, revealed that it is currently experiencing its “lowest vacancy rate in a decade” and is continuing to attract high demand from occupiers large and small.
CoStar further embellished this trend for regional demand by drawing on data that suggests regional office rental growth is not only outperforming London, but is expected to continue rising for at least the next two years.
In particular, CoStar singled out Birmingham City Centre as a trending area for companies moving into Central Business Districts from fringe locations, in order to attract and retain talent. Another prime example is the M25 corridor and parts of Greater London, which are attracting companies away from central areas due to shorter commutes, lower rents and easier access to regional areas.
All of this analysis points to growing demand for flexible workspace in regional UK cities, with clients favouring both the Central Business Districts for talent acquisition and city centre prestige, and outer areas for ease of access and better transportation.
Regardless of your requirements, the good news for occupiers is that the flexible office market is only set to grow, which means businesses of all sizes can get the location, the flexibility, the high-quality workplace and the support they need to fuel their growth journey.
Interested in finding out more about serviced offices in prime regional locations? UBC has 8 business centres across the UK, from Southampton waterfront and West London to Central Birmingham and Warrington. Visit ubcuk.com to find out more.