- 4 Minute Read
- 09th June 2020
Market Push for Flexible Workspaces Post COVID-19
In the new world, the #1 priority for businesses is to ensure the safety and well-being of their employees. Governmental guidelines are being interpreted to the best of anyone’s knowledge as to how to prepare the office space for a new normal, where interaction and collaboration will be re-defined.
Your office space is the centre of idea sharing and creativity and this needs to be preserved. Ensuring the office space complies with the new normal is a challenge to strategize and implement. The challenge is abstract, but the solution is straight forward – Flexible Workplaces.
This article aims at guiding you to better understand your possibilities when it comes to renting an office space, the various types of rental agreements and why flexible office space is the ideal solution for business of any kind planning to transition back to the office post lockdown.
Office Costs – How to preserve capital and reduce overheads
When lock-down eases, we will enter a new world, a new normal, which will be a major reset and reboot for everyone. We are all coming to terms with the fact that business will never be the same again, in terms of general priorities and especially with regard to commercial property.
Businesses are seeking health-conscious working environments that enable them to work as safely as possible, where health and well-being are prioritised. Business owners also want to know the best way that they can preserve capital and reduce overheads when considering office costs. They are looking for cost-effective solutions which don’t tie them down long term and offer flexibility to upsize or downsize as circumstances dictate.
Whether you are a global enterprise business or a small start-up, where these considerations are the priorities, flexible workspace is the answer. Here we take a look at what a flexible office is and contrast the cost benefits with that of a conventional lease.
The solution for post lockdown – Flexible Workspaces
Flexible office space comes in all shapes and sizes. This umbrella term encompasses flexible workspace, serviced offices, coworking spaces, managed offices and hybrid spaces.
Flexible offices are “work ready” spaces. It’s a “plug and play” environment that’s ready when you are. Offices come fully furnished with furniture, utilities, IT infrastructure, security and management supplied. Many flexible workspace providers have been quick to invest in converting their offices to be COVID-19 compliant, enabling you to preserve your capital and reduce overheads. Flexible offices are available to move in next day and offer maximum flexibility, with flexible contracts typically ranging from one month to two years.
Financial benefits of flexible workspaces:
- No up-front capital expenditure and as far as possible…
- All costs are wrapped into one all-inclusive simple monthly invoice.
The outdated nature of traditional leasing in the New World
Conventional leased office space involves renting space directly from the landlord of the building, on a price per square foot per annum basis, with no shared facilities such as club lounges, meeting rooms etc.
Leasing involves a fixed-term inflexible contractual commitment i.e. you will be stationed in one place for a long period of time and customisation comes at a significant cost.
Financial hurdles with traditional leasing:
- Up-front costs and more capital expenditure: from painting, construction, furniture, utilities, etc.
- Ongoing occupational costs such as rates, insurance, utilities, security etc.
- Unexpected, additional service charge contributionsg. towards new roof, lift, exterior improvements.
- Expensive reinstatement costs (dilapidations)
Lease costs that you need to budget for with traditional leasing:
When entering a lease agreement, you will need to budget for the following:
- Up Front Cap Ex Costs: Fit out, furniture, Stamp Duty, Professional Fees etc.
- Core Property Costs: Rent, rates, service charge, buildings insurance etc.
- Service Costs: IT, utilities, security, cleaning, gardening, refreshments etc.
- Occupational Maintenance Costs: Building maintenance, dilapidations, air conditioning, liability for unexpired term of lease etc.
The three reasons for choosing Flexible Workspaces
Flexible workspaces allow businesses to leverage property as an agile rather than a fixed asset. With agile flex property, you can choose what initial Capex will go into the space and allow your workspace to expand or contract depending on the needs of your business.
Three key benefits of flexible workspace
Flexible offices are increasingly popular with large businesses and enterprise too who value the flexibility and agility that serviced offices provide. Three key benefits can be summarised as:
- Cost – When you factor in total occupational costs eg fit-out, maintenance and service provision, a serviced office can often work out cheaper than a leased office.
- Flexibility – Flex offices can be secured on short term agreements to suit your needs. You can upsize or downsize your space as required with minimal hassle.
- Convenience – The provision of all fixtures, fittings and furnishings means that you can be working in a flexible serviced office within days of signing the agreement.
Should you take a Lease or Flex space?
Due to the large upfront expenditure of renovating and setting up the building, there’s a high initial cost to traditional leased property. There is every likelihood that the number of employees will change, market impacts will be volatile, and technology will impact the business requirements. Introducing these risks in future planning changes everything.
Unpredictability demands flexibility
Looking to the future, a business may grow or shrink in terms of number of employees. Working patterns may change or life changing events like COVID-19 may occur. In these uncertain times companies want to build in agility to their property portfolio to address the realities of today’s fast moving and unpredictable business world. Flexible workspace provides that opportunity.
Office Freedom - Helping you make the right decision
Our experienced expert consultants will help you find the office that’s perfect for your needs and also negotiate the best terms and price on your behalf, all free of charge i.e. no finders’ fees. We will help you make the right decision for your business with independent and impartial advice. Since 1993 we’ve helped over 38,000 businesses find their new office. Call us today on 0203 603 2576 or contact us here https://www.officefreedom.com/company/contact-us