Flexible Serviced Offices Out Perform Traditional Leasing Amidst Downturn

Reading Time: 2 minutes

Serviced Office Giants Regus Plc has announced profits for the first half of the year despite the impact of the slowing economy on the Commercial Office Property Market as a whole.

Conversely, Commercial Agents are reporting continued losses this month with some of the UK’s largest including Cushman & Wakefield and DTZ announcing record losses and consequential redundancies within Commercial Property sectors.

This news comes as little surprise following months of speculations that operators of Serviced Offices had a good chance of riding the downturn.  Amidst the crunch Serviced Offices continue to prevail thanks to the flexibility that they offer to businesses who are increasingly reluctant to commit to longer traditional leases.  Perhaps the term “benefit” is a little strong, but with companies favouring flexible lease terms, the downturn has certainly not had a damning effect on Serviced Office providers who stand in an obvious vantage point over Commercial Agents and Landlords who may be hoping to secure 3 – 5 year Conventional leases.

The ability of the Serviced Office lease to allow companies to expand or down-size with ease, and so pay only for essential space, is having an apparent impact with Serviced Office operators keeping their heads well above water during tough economic times. 

The Virtual Office concept also deserves a mention and is certainly playing a role in the benefits of the Serviced Office Operator, many of whom offer the service as part of their business activities.  With an increasing amount of companies now considering taking a Virtual Office, either as a permanent or temporary solution, this is surely proving to be a lucrative side line for many.  Easy Offices has seen a massive influx of Virtual Office enquiries over recent months and can see no immediate let up for companies favouring the service as a very viable alternative to committing to the overheads associated with leasing a physical office space.

For further information on Serviced Office and Virtual Office solutions in your area please call our sales team on 0800 085 5050 or click here to be taken to our main website.

3 thoughts on “Flexible Serviced Offices Out Perform Traditional Leasing Amidst Downturn”

  1. The Stock prices of Service Office providers (Regus and others) should not be looked at (at this time) as a key to their health.

    Service Office providers are – unfortunately – intrinsically tied to the Real Estate market (even though they are really a service industry). Since the Real Estate driven market crashes started in June 2007 – Regus (and others) stocks have dropped every time bad news attached to the word Real Estate came out of Wall Street. Once the air cleared, the stocks would rise again, only to get battered the next time a Financial Institute filed for insolvency.

    Place the performance curve of the DOW / Wall Street on top of the curves of Service Office providers and you will see that they perform almost identically.
    My interpretation is, the Service Office Industry is still too unknown for people to judge it on its own or for it to stand on its own. If Real Estate gets hit – so too the Service Office Industry. If Wall Street gets hit – so too the Service Office Industry.

    There is no question that the upcoming months will be “tough” for the Service Office providers, but the product and industry are (finally) strong enough in 2008 to weather the storm (vs. situation in 1990’s), and most of the “big” providers are sitting on enough CASH and strong forward order books to see them through.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top