As office business gets brisker, there’s no shortage of support for those in need of painless expansion or initial entry to the market place. The widespread availability of serviced offices and managed business space will help meet needs of incoming businesses, start-ups and sudden growth situations as the North East economy continues to pick up.
Businesses have already benefited from access to serviced offices and managed business space across the region for more than two decades. From the start, the space was
created on easy in/easy out flexible lease terms - advantageous especially to new and expanding smaller firms. They could grow cost effectively through shared facilities and on-site management.
A big plus too is that it enables young businesses with modest initial business plans to enjoy a working environment that might be beyond their means if they looked for their own long-term premises straight away.
In Newcastle, lots of space for the purpose has been carved from existing vacant buildings such as Churchill House, or by subdivision of larger vacant floor plates including Regus in Rotterdam House and the City Executive Centres within Cuthbert House, Newcastle.
The concept has also moved “out of town” to major office parks, as at Regus on Doxford Park, Sunderland and Team Valley, as well as the CBX – Cobalt Business Exchange at Cobalt Park, North Tyneside. CBX, offering fully fitted office suites, has been developed within the former Siemens/Atmel building beside the A19.
CBX, a 120,000sq ft independent serviced facility, and the CBX Central offices have recently attracted HP and IBM. Tenants have their own coffee shop, restaurant, conference centre and free parking. It is 96% occupied, has an 88% retention rate, and an above average agreement length of around 27 months. More than 700 people currently work there, in anything from sole trading offices to organisations the size of Duco and Capita.
At Gateway West Business Centre, Newburn Riverside, Business Space Solutions have extended their business centre to some 15,000sq ft. This was launched in February 2012 and strong interest is ongoing, the operator says.
The offer available in terms of serviced offices and business centres, attainable on flexible terms, can not only play a big part in the region’s economic revival but also speedily meet changes of space needs across the region at a time when staffing levels may be climbing again.
GVA believe the implementing of flexible working in offices, and remote working, will accelerate over the next decade. Organisations will increasingly adopt a broad mix of out of office working, serviced offices and traditional leased/owned property. The issue of legacy property will be a barrier. But flexibility of occupation (shorter leases, serviced offices, managed offices, outsourcing, office-hotels etc) will become more prevalent.
One company has expanded three times in two years at The Grainger Suite. Peak Indicators, a business intelligence consultancy run by Matt Harte, moved from 138sq ft and is now in 1,905sq ft. The word is that the firm will probably take more space again in due course.
Victoria Hunt, business manager at Cobalt Business Exchange, says: “The serviced office industry has changed dramatically in the last few years. We are seeing a range of start-up consultancies and businesses looking for greater flexibility towards their office needs.”
The Grainger Suite, one of the longest-serving managed office facilities in the North East, was opened in the Regent Centre at Gosforth more than 30 years ago by North British Properties (NBP). It was then retained when Sun Life Properties acquired NBP. At one time, it was little over 3,000sq ft. Today it is rapidly heading towards the 20,000 sq ft mark. Its recently started fourth phase is 85% occupied and the first three phases are reaching 99% occupancy. Christine Murdock, the Suite’s marketing manager, says: “At the time The
Grainger Suite was formed in Dobson House, the concept of managed office space was entirely new. Today, especially in light of businesses being super-cautious about controlling overheads, the managed concept is increasingly in demand. For example, we had developed phase two about two years ago, have raced through phase three and now the fourth phase, started late last year is filling rapidly.”
She says it has much to do with controlling costs as it has with flexibility. “The traditional lease is more tenant-friendly than in days of the 25 year FRI lease with its upwards only rent reviews every five years.
“But despite terms being more relaxed, companies either starting up, contract driven or dedicated to managing a business with pretty much a watertight control on property costs, we find a broad range of businesses want short-term commitment, flexibility to allow for growth, access without the penalty of city centre traffic and parking costs, a known ‘address’ and access to public transport,” she adds.
Director Michael Jurowski chose The Grainger Suite for the Lorna Michaels recruitment agency in 2010. “It’s a convenient location – comfortable, affordable and flexible, he explains. “There is free car parking, dedicated meeting rooms, excellent amenities such as
the High Street and that ‘community of businesses’ here.”
Matt Harte says: “Peak Indicators started at The Grainger Suite with four people, now has a dozen employed in Newcastle and 60 across the UK and Ireland, all in just four years. The fact that we have made three moves within The Grainger Suite says much about the concept of managed space.”