What is a serviced office?
The popularity of serviced offices is soaring across the UK. We explore what they are, how they’re different, and how much they cost...
When it comes to workspace for small businesses, serviced offices have become a popular choice.
But what exactly are they, how do they differ from the other options out there, how much do they cost, and what are the benefits of using one? Read on for a break down of everything you need to know about serviced office spaces…
What is a serviced office?
Also known as managed offices or business centres, a serviced office is a workspace which – unlike a traditional office space – comes ready-furnished, with internet and phone lines connected and devices such as printers equipped.
They also tend to include in-house facilities and services including meeting rooms, a reception team who’ll take calls and direct visiting clients on your business’ behalf, and staff such as cleaners.
Besides this, a linchpin of the serviced office is that they tend to offer more flexible lease arrangements than conventional offices. While the latter might try to lock your business in for a year or more, most serviced offices can lend you space for as short a time as a month, a week or even just one day.
Major UK serviced office providers include Regus, The Office Group, WeWork, Spaces, HQ and MWB. The trade association that represents the serviced office sector, The Business Centre Association (BCA), is a helpful resource, providing a national listing of UK serviced offices.
The history of serviced offices
The first serviced office spaces reportedly appeared in the 1960s in the US, where legal attorneys would work together in a pre-furnished space to share secretarial services alongside the overheads involved. It’s said that such ventures paved the way for what we know as serviced offices today.
Paul Fegen’s Fegen Suites, which launched in 1966, was a notable example – complete with furniture, telephones, conference rooms and a reception service, it’s considered a pioneer of the industry.
Since, serviced offices have become a mainstay of the workspace world, with entrepreneurs and businesses from all sectors realising their benefits. But it’s in recent years that their popularity has truly soared.
According to a 2018 report from Savills, serviced office take up in the UK increased by 157% in 2017, with London seeing a 141% increase while demand in regional markets rose by a whopping 406%. At the end of 2017, there was 2.9 million square feet of serviced office space in the UK.
Serviced offices for start-ups and small businesses
A reflection of this, sole-traders, start-ups and small businesses are increasingly turning to serviced offices – but what makes them a good fit for new and growing enterprises?
Firstly, most serviced office providers will happily facilitate the (sometimes haphazard) growth patterns of a start-up. Should you take on a few hires and realise that you need more space to operate comfortably, providers make it simple to upgrade your agreement and move to a bigger area within the building.
Similarly, if you need to cut back, many will allow you to downsize as necessary.
Secondly, the fact that serviced offices come ready to go is a key selling point. With desks, tech and phone lines already set up, companies can get straight to business with minimal downtime on the day they move in.
Considering that most start-ups and small businesses can’t afford to miss a single phone call for fear of losing a potential client, this immediacy is certainly reassuring and minimises one of the biggest stresses of an office move.
The unpredictability of running a new business or freelance operation means serviced offices’ flexible lease agreements are also a welcome offering. It’s unlikely you’ll want to be tied into a year-long agreement while you’re still working to establish the business.
The services provided in these spaces, from bookable meeting rooms to a manned reception desk, also make for an enticing offering. After all, getting all the help you can when it comes to answering phones and speaking to clients isn’t to be sniffed at.
Serviced office perks
Alongside these valuable benefits, it’s worth noting that many serviced offices also house a range of other perks to promote its members’ wellbeing.
These can include free tea and coffee-making facilities, fully-stocked kitchens, games such as pool tables, table football and table tennis, and breakout spaces where employees can gather and chat in a more casual setting than a meeting or conference room.
Many serviced offices also strive to provide interesting office spaces with modern layouts, plush furniture and unique features to negate the sense of monotony that can be intrinsic to more traditional, sterile office environment.
It has to be said, however, that serviced offices can be expensive (more on that below). But this is often because all of the above benefits are factored into the price. It’s up to you to decide whether the services you’ll receive in exchange for your money will be worth the cost to your business.
Serviced offices vs coworking spaces
Of course, there are plenty of alternative options available to start-ups, with coworking spaces being a popular choice. In some cases a workspace can be both a serviced and a coworking space, as both are known to provide flexible leasing and in-house facilities and services.
However, it’s in coworking’s sense of community where a key difference lies.
Most coworking spaces actively encourage collaboration between its members, and will put on networking events for this purpose. This isn’t a typical focus in serviced offices. So, if you think you’d benefit from working with other entrepreneurs and learning from their ventures, you’d perhaps be better off joining a space specifically designed for coworking.
It’s also more likely that renting a private office space in a coworking facility will require you to bring your own desks and equipment.
It’s also true that coworking spaces are, on average, slightly cheaper than serviced offices – however pricings will depend on the quality of the space and what you require from it.
Serviced office costs
Serviced offices typically charge a monthly fee per desk on a pay-as-you-go basis, and the amount will usually depend on the size and quality of the space, the services and facilities on offer to your business, the city or town in which the building is located, and whether or not the space is in a desirable part of town (for example near transport centres or cultural hubs).
According to multiple sources, Sheffield and Cardiff are home to the cheapest serviced offices in the UK, with an average monthly cost of £275. Bristol follows closely at £300.
Meanwhile, London is unsurprisingly reported as the most expensive city for serviced offices, ranging from an average monthly fee of £600 to over £750 in central.
However, it’s worth noting that these figures can still vary. You might, for example, find a luxurious serviced office in Sheffield whose price goes above and beyond the city’s average. And you might just as easily find a more basic offering in London for a lot less than you’d expect.
What’s key is understanding which services are included in this agreed monthly fee and which are not. Typically, a serviced office provider will charge an additional monthly cost for internet access and telephone use which may cost as much as £35 per desk. They may also charge extra for you to use meeting rooms and printers.
You might also encounter a couple of surprise fees for things you hadn’t really thought about – for example, your provider might charge you to have your business’ name listed at the building’s reception.
To avoid surprises, be sure to ask your provider for a thorough list of all the charges that’ll be coming your way – based on the services you’ll require – before signing an agreement.
Moving out and moving on
Many businesses never move out of serviced offices as they find that, for them, the mix of services represent good value in the longer term.
Others move on once they have stabilised in size – whether to achieve better value for money or a better image with their own office building. A larger business might want to provide its own services to employees and display its own signage above the front door.
Moving your business into a serviced office could be a cost-effective solution to your workspace needs that avoids the trials and tribulations of traditional property letting. It’s an office space option that means you can just move in and get straight down to business while worrying about little else.