The rise of serviced office space and how it's disrupting traditional leases

The rise of serviced office space and how it's disrupting traditional leases

Searching for the right office space is one of the most important steps you’ll take for your business, whether you’re a freelancer or you run a large company. But, these days, you don’t have to settle for traditional office leases anymore because you now have a new option: flexible office space.

Why has flexible office space become such a popular alternative to traditional leases, and what benefits can it provide you? Once you start comparing these two options, it becomes clear that there are things you can get with flexible spaces that you can’t get from traditional offices.

Traditional Leasing: The Basics

Photo: Workers in Serviced Office

If you are the type of business owner who prefers to have a long-term lease agreement in place, a traditional office might seem like the right path to take to grow your organization. Despite the benefits, though, there are some drawbacks to consider.

First off, searching for the ideal office space to lease long-term can take quite a bit of time. A lot of business owners opt to use a real estate agent to make the process of finding places for rent easier. Once you locate a place, negotiating a contract that works for both you and your landlord is key. Hiring an attorney who can advise you and look over the contract before you sign it is a smart idea.

It’s also important to keep in mind that, in addition to your monthly lease payments, you may also be responsible for a variety of other costs. These will depend on your contract with the landlord, but they might include things like security costs, utility costs, and maintenance and repair costs. Plus, you need to factor in the everyday expenses of running your business.

The Growth of Flexible Office Space

The rise in popularity of the serviced office model, coworking, and flexible office space has given business owners around the world another option when it comes to finding the perfect place to work, and it has also impacted traditional leases.

Even though you are likely to see a lot more traditional offices than flexible offices right now, the trends indicate that flex spaces are going to become more abundant over time. According to JLL, the average annual rate of growth for flex spaces has been around 22% since 2010. And, whether your business is located in the U.K., the U.S., Europe, or Australia, the amount of flexible office space available is expected to continue growing in the years to come.

As the demand for flexible spaces continues to climb, the owners of traditional offices may need to shift in order to compete, and they might end up offering at least part of their traditional spaces as flex offices.

Standard Lease Terms vs. Flexible Space Terms

Photo: WeWork - 50 Carrington Street Sydney

There are several differences between standard leases and flexible leases, so you can decide which type of office arrangement would work best for your business and its short-term and long-term goals.

For example, when you are using a flexible office area, you might be able to enter into a one-year or multi-year agreement, or even an agreement that only lasts several months. On the other hand, you might be required to sign a contract that keeps you in a traditional office lease for several years, so the commitment you’d need to make would be much longer for a traditional lease.

Because traditional leases tend to be fairly standard, if you need to alter the terms, you might need to spend a lot of time negotiating a traditional lease and having to pay legal fees to a lawyer to ensure you’re making a sound decision, even if you plan to accept the terms as-is. Flexible leases, though, are by definition flexible, or at least less long-term, so getting into a flexible space might be easier, more affordable, and less time-consuming.

How Do Costs Differ?

Professionals who choose flexible offices might realize that they are able to save money when it comes to overhead costs, thanks to more flexible terms and more affordable leases.

You can enter into flex office agreements in which the rent you pay also goes towards ensuring that the facility and equipment are properly maintained and cleaned. If rent includes your equipment as well, you can have everything you need to run your business effectively and efficiently, with one less separate line item to worry about.

Overall, if you’re searching for a furnished, ready-to-use office space that you can move into quickly, you might discover that flexible spaces give you everything you need at a cost you can afford and with a minimal commitment.

Who Are the Flex Office Players in Australia?

Here is a list of some of the top flex office providers in Australia:

  • WeWork – Founded in 2010, and with more than 800 locations around the world, WeWork can help you get the workspace you need and the flexibility you desire. Every type of business, from individuals working as freelancers to Fortune 500 companies, has been able to take advantage of what this brand has to offer.
  • IWG (Regus) – Regus is a company of the International Workplace Group (IWG), and it is one of the most well-known workspace providers in the world. They give you access to various office spaces that can suit your business’s needs.
  • Christie Spaces – With decades of experience, this company can help you get the office space you need, with benefits that include cleaning services, concierge services, meeting rooms and conference spaces, business class printers, mail handling, and more.
  • Wotso Workspace – Whether you have a small team or a large one, this company provides flexible office space that will be tailored to your needs. And you can use month-to-month agreements so you won’t be locked into a long-term commitment.
  • ServCorp – This company has been around since 1976 and now operates in more than 150 locations around the world. Options include offices, meeting rooms, coworking spaces, and virtual offices, so they have something for everyone.
  • Victory Offices – With an emphasis on providing stellar customer service, while also offering tailored solutions so you’ll only pay for what you’ll end up using, Victory Offices has flexible workspaces throughout Australia. They provide short-term leases and modern amenities, and the outgoings are included too.

The Motivation to Switch to Flex Office Spaces

Photo: Unsplash Image

More and more businesses are taking advantage of flexible office environments for a variety of reasons. Here are some examples:

  • Geographical factors: You can find flex office spaces all over the world, so if you want to set your business up in a major city, you can quickly and easily do so. And, if you need to move your business again soon after, you can also do that with ease, thanks to the flexible arrangements that come with these types of offices.
  • Lower upfront costs: Because there aren’t any capital costs, and many flex spaces are already set up with equipment and furniture, it might be more affordable to move into and out of a flexible office than a traditional space.
  • Shorter move-in times: There are many flexible office providers, as you can see above, so once you find the space that you need, you can move in surprisingly quickly whenever you are ready. This helps you avoid downtime and keep your business running as smoothly as possible despite your transition into a new workplace.
  • Office retraction or expansion: When you need to make a change to your office environment, whether you need it to be larger or smaller, you can do so efficiently and affordably when you are in a flexible workspace. This allows your business to adapt to changing needs without wasting much time or too many resources.
  • Opening a new branch: Again, because flex spaces are available around the world, you can open a new branch of your business in an area where you want your company to have a presence.
  • Moving out of your home office: If you’re a freelancer or your business is growing with several employees, you can move out of your home office and into a flex space, with minimal commitment and low costs. It may be less stressful than going through the process of finding a traditional space for lease.
  • Lease ending: When a current lease is ending, and you want to try something different, or at least give yourself more time before signing onto another lease, a flexible workspace can help you move in and get up and running without skipping a beat.
  • Upgrading your office: Because flexible office spaces are usually modern, aesthetically pleasing, and centrally located, they offer plenty of opportunities for upgrading your office whenever you’re ready.
  • Managed services: If you want to focus more on getting things done to run your business and less on setting up and maintaining your office space for work, a flexible office that provides managed services might be just what you need.

Flexible Offices: A Modern Solution for Businesses of All Sizes

Office spaces aren’t one-size-fits-all, and there’s reason to consider everything from traditional leases and flexible spaces to hybrid solutions. If you aren’t looking to sign a long-term lease, moving into a flexible office might be the right way to suit your business’s needs right now.

Bottom line: whether you’re an established business owner who has been working for many years,or you’re just getting your startup off the ground, moving from a traditional leased office to a flexible office combines the benefits of a wide range of modern perks and amenities with money-savings, while reducing your time investment, stress, and frustration.

When you’re ready to find the right flexible office, Rubberdesk is here to assist you. We help simplify the process of locating, touring, and renting furnished and serviced spaces by the month or by the year. Contact us today to learn more.

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As specialist brokers in the flexible office market, Rubberdesk is across all the options, offers and availability. We have real time pricing for thousands of spaces listed by hundreds of providers to help find your next office.

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