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Professional services firm PwC recently predicted that by 2022 the majority of businesses will allow their employees to work remotely through different cloud technologies. This rise in remote working as well as developments in cloud computing and the global economic recovery is beginning to shape the future of the commercial real estate market.
Only 14% of UK employees expressed a desire to work in a traditional office based environment in the future, according to research by PwC. Therefore, in order to remain competitive and attract the best talent businesses will have to adopt innovative and flexible workplace solutions, such as serviced offices.
In London alone, the serviced office property market has increased by 67% over the last decade, according to research by Deloitte. Covering approximately five million square feet of central London, a 21% increase over the previous 10 years. This significant growth highlights the increasing attractiveness and demand for serviced offices.
Flexibility is a key differentiator of serviced offices as they provide the opportunity for companies to adjust the type and amount of office space required for their current and future business needs.
Fast growing small to medium sized companies, in particular media and technology firms, are leading the trend for the flexibility associated with serviced office leases as they are often unable to accurately predict their future growth and employment rates.
By taking advantage of short-term leases of serviced offices, procurement can help their businesses add value and manage their real estate costs by leasing only the required amount office space. Ultimately, reducing the possibility of potentially unused or underutilised desk space that can come with long-term fixed office leases.
The development of serviced office space is predicted not only to continue to grow in London but in other locations worldwide. Businesses expanding into emerging markets will increasingly adopt serviced office leases due to its unique nature and associated low risks and low costs compared with longer term options.
If they are not already doing so, both developers and landlords will need to effectively respond to the market's demands for this type of flexible working option in order to remain competitive and grow their market presence.
To find out more about commercial property leasing market and how procurement can add value to their business, please click here to download a snapshot of the latest Procurement Leaders Property Leasing report.